Rare True Value-Add Asset Trades for $106M

LONG BEACH, CA—An undisclosed institutional investor has sold the World Trade Center office building in Downtown Long Beach, CA, to a partnership between Greenlaw Partners and Walton Street Capital for $106 million. The property, which is 59% leased, is a rare true value-add opportunity, and as a result, attracted tremendous interest from investors. In total, the sales team received 100 confidentiality agreements.

“It was a big value-add deal, and at this stage in the cycle, it is hard to find true value-add deals because a lot of projects are leased given the continued expansion of the economy,” Kevin Shannon, vice chairman at CBRE, tells GlobeSt.com. “As a result, these types of deals are hard to find, especially in markets like L.A.” Shannon represented the seller in the transaction along with Michael Moll, and Ken White. CBRE's Valerie K. Achtemeier also arranged debt for the sale.

Located at One World Trade Center, the 27-story, 574,981-square-foot property represents 14% of the Downtown Long Beach office market, and is one of three true class-A assets in the area. The seller decided to dispose of the property because of the peak market timing, according to Shannon, and because the submarket is improving. “That market is slowly improving, and you have more retail and residential—which is helping to improve the vacancy rate—and you have organic growth,” says Shannon. “There are some positive things happening, although the recovery can be described as slower. Because the vacancy is general higher that other areas, a lot of the buildings fit a value-add profile, but there are also stabilized assets in Downtown Long Beach as well.”

The buyer intends to renovate the property to boost occupancy, and has a typical three-to-four year value-add business plan.