The Swig Co. Moves Capital from SF to LA

LOS ANGELES—The Swig Co. has acquired the Sepulveda Center, a 12-story 180,000-square-foot class-A office building in West Los Angeles, from KBS. This is the firm's sixth acquisition in the L.A. market in the last five years. To purchase the asset, the firm exchanged out of an office property in San Francisco, which is part of a strategy to redeploy capital to the Los Angeles market to grow its Southern California portfolio. The purchase price of the property was not disclosed, but market sources unrelated to the deal say that Swig paid upwards of $50 million for the property.

“This building is the downleg of an exchange from San Francisco. We are redeploying investment capital from San Francisco to L.A., and the company has been trying to grow its Los Angeles portfolio,” Tomas Schoenberg, EVP of investments at the Swig Co., tells GloebSt.com. We have a great portfolio of assets in San Francisco—our California portfolio is about one-third Southern California and two-thirds Bay Area—but it has been a priority for us to grow our portfolio in L.A.

While the firm is looking to move capital to Los Angeles, this particular asset was a great opportunity for both its location and pricing. The firm is specifically looking to bolster its portfolio on the Westside. “This is a fantastic location,” adds Schoenberg. “We are really focused on buying properties that are on the Westside that are a good relative value, and this property, although it sits by itself, is really in the center of everything. It is proximate to Playa Vista, Century City, Olympic corridor, the airport and Culver City, and it has a cost structure that is much easier to manage for tenants that are attracted to Playa Vista and Century City.”

The Swig Co. was not alone. L.A.'s office market is heating up, due to a diverse employer pool and temperate development, and other investors are looking to get into similar markets. While this property is on the Westside, it isn't located in the more popular high-barrier markets, which kept competition down. “There was competition,” adds Schoenberg. “This is not a location that would see global attention, but it was certainly a competitive process and we had to be competitive to prevail. We have bought a property a property from this particular seller in Mountain View, and it was a good process for them. That helped our cache this round. Obviously we had to be at the right price as well, but in terms of ability to perform, we had really good cache going into this deal with this seller.”

The property is currently 85% leased, and Schoenberg says that it was well maintained and not in need of any major work; however, Swig is going to perform some capital improvements to enhance the property. “We would like to continue the leasing momentum,” he says. “The building has been well maintained, but, like with all of our properties, we want it to continue to be relevant. One of the things that we are looking into is improving the arrival experience to make it feel more modern and special. We are looking at landscaping improvements and improvements to an outdoor patio area.” Schoenberg did not say the capital investment, but did say that it was in the several-million-dollar range.

LOS ANGELES—The Swig Co. has acquired the Sepulveda Center, a 12-story 180,000-square-foot class-A office building in West Los Angeles, from KBS. This is the firm's sixth acquisition in the L.A. market in the last five years. To purchase the asset, the firm exchanged out of an office property in San Francisco, which is part of a strategy to redeploy capital to the Los Angeles market to grow its Southern California portfolio. The purchase price of the property was not disclosed, but market sources unrelated to the deal say that Swig paid upwards of $50 million for the property.

“This building is the downleg of an exchange from San Francisco. We are redeploying investment capital from San Francisco to L.A., and the company has been trying to grow its Los Angeles portfolio,” Tomas Schoenberg, EVP of investments at the Swig Co., tells GloebSt.com. We have a great portfolio of assets in San Francisco—our California portfolio is about one-third Southern California and two-thirds Bay Area—but it has been a priority for us to grow our portfolio in L.A.

While the firm is looking to move capital to Los Angeles, this particular asset was a great opportunity for both its location and pricing. The firm is specifically looking to bolster its portfolio on the Westside. “This is a fantastic location,” adds Schoenberg. “We are really focused on buying properties that are on the Westside that are a good relative value, and this property, although it sits by itself, is really in the center of everything. It is proximate to Playa Vista, Century City, Olympic corridor, the airport and Culver City, and it has a cost structure that is much easier to manage for tenants that are attracted to Playa Vista and Century City.”

The Swig Co. was not alone. L.A.'s office market is heating up, due to a diverse employer pool and temperate development, and other investors are looking to get into similar markets. While this property is on the Westside, it isn't located in the more popular high-barrier markets, which kept competition down. “There was competition,” adds Schoenberg. “This is not a location that would see global attention, but it was certainly a competitive process and we had to be competitive to prevail. We have bought a property a property from this particular seller in Mountain View, and it was a good process for them. That helped our cache this round. Obviously we had to be at the right price as well, but in terms of ability to perform, we had really good cache going into this deal with this seller.”

The property is currently 85% leased, and Schoenberg says that it was well maintained and not in need of any major work; however, Swig is going to perform some capital improvements to enhance the property. “We would like to continue the leasing momentum,” he says. “The building has been well maintained, but, like with all of our properties, we want it to continue to be relevant. One of the things that we are looking into is improving the arrival experience to make it feel more modern and special. We are looking at landscaping improvements and improvements to an outdoor patio area.” Schoenberg did not say the capital investment, but did say that it was in the several-million-dollar range.