Bixby's Pacific Center Fetches $69M

TORRANCE, CA—Bixby Land has sold the Pacific Center, a 292,000-square-foot office building in Torrance, CA, for $68.5 million to Stream Realty Acquisition. The property traded hands after Bixby completed a $6 million renovation plan to create a modern office space and raise occupancy levels. Bixby bought the property, originally called South Bay Tower, in 2013 for $52 million.

“The capital markets environment right now is obviously very good for harvesting sales,” Kevin Shannon, vice chairman and managing director at CBRE, tells GlobeSt.com. “Pacific Center is in at the prime location in the Central Torrance office market. The building is next to Simon's mall and several other retail amenities, and in close proximity to the South Bay Courthouse and Providence Hospital. Bixby repositioned the asset and made it more of a creative office environment, renovating the lobby, landscaping and common areas. Bixby achieved much higher rents on over 100,000 square feet of new and renewal leases after their renovation plan was completed. The sale provided Bixby with a nice return but still left some “meat on the bone” for the next buyer.” Shannon led the CBRE team that represented Bixby in the transaction. The buyer represented itself in the transaction.

When Bixby purchased the property in 2013, it had a 63% occupancy rating. After implementing the capital improvement plans, which included significant exterior renovations, the inclusion of eco-friendly landscaping, interior improvements to common areas and a LEED certification, the occupancy rose to 80%, with Bixby signing 55,000 square feet of new leases. The new design and higher occupancy attracted a healthy flock of buyers to the marketed property, garnering interest from 80 buyers, according to Shannon. “The ongoing renovation of the adjacent mall by Simon and JP Morgan got capital even more excited about owning the best building in the market,” he says. “There is always interest by buyers for best in class properties even in smaller markets like Torrance.”

The tenant mix at the building includes All Nippon Airways, Living Social, Morgan Stanley, Bank of America and Wells Fargo Central, which isn't unusual for the corporate-friendly market. “Central Torrance is situated at the base of the affluent Pales Verdes peninsula, just east of Redondo Beach,” says Shannon. “This area has a lot of entrepreneurial executives and professional tenants that like to locate near their executive housing.”