Toyota Vacancy Isn't Deterring Investors in Torrance

LOS ANGELES—Next year, Toyota is set to vacate its 15-building office facility in Torrance. The move will bring more than 2 million square feet of office to the Torrance market, but the new supply doesn't seem to be deterring investors. PMRG and Mariner Real Estate Management have partnered to purchase the Torrance Technology Campus, a five building, 573,167-square-foot office property located on 26.7 acres. The sales price was not disclosed, but sources unrelated to the deal tell GlobeSt.com that the asset traded hands for $67 million.

“While we are actively monitoring the market's competitive landscape, we are not overly concerned about competing with the to-be-vacated Toyota space,” Roger Gregory, president of investment at PMRG, tells GlobeSt.com. “Our vacant space will be attractive to a certain type of tenant.  We believe the cost to repurpose the Toyota buildings to attract the specialized needs of our targeted tenant profile would be especially high for both the owner of the Toyota buildings and the tenant.”

Located at 3100 Lomita Blvd. in Torrance, CA, the Torrance Technology Campus is 70% leased by two tenants, L-3 Communications and Torrance Memorial Medical Center. PMRG is a value-add buyer and Gregory says that this asset fits perfectly into its business strategy. “Leasing and extensive capital expenditures, however, are both required before the building is ready for the core market,” says Gregory. “Given our starting basis, the tenant specific nature of the property, our market knowledge and our ability to provide a much-improved experience to the tenant at below market rates, we believe we can deliver on our vision while providing a healthy return to our investors.”

To drive leasing at the property, PMRG will start by negotiating lease extensions and, if possible, expansions with the two current tenants. “Leasing our vacant space is of secondary concern,” says Gregory. “In fact, we programed almost 10% vacancy in our business plan.”

Once the investors complete the renovations and stabilize the property, it will turn it over to a long-term holder. We believe this is a perfect property for a long-term core buyer,” says Gregory.  “We are a value-added buyer and look to exit an asset once we believe maximum value has been realized. We do not plan on exiting this asset until we have completed our lease up strategy and an extensive capital expenditure strategy. The next buyer will likely be a long-term core holder.”

LOS ANGELES—Next year, Toyota is set to vacate its 15-building office facility in Torrance. The move will bring more than 2 million square feet of office to the Torrance market, but the new supply doesn't seem to be deterring investors. PMRG and Mariner Real Estate Management have partnered to purchase the Torrance Technology Campus, a five building, 573,167-square-foot office property located on 26.7 acres. The sales price was not disclosed, but sources unrelated to the deal tell GlobeSt.com that the asset traded hands for $67 million.

“While we are actively monitoring the market's competitive landscape, we are not overly concerned about competing with the to-be-vacated Toyota space,” Roger Gregory, president of investment at PMRG, tells GlobeSt.com. “Our vacant space will be attractive to a certain type of tenant.  We believe the cost to repurpose the Toyota buildings to attract the specialized needs of our targeted tenant profile would be especially high for both the owner of the Toyota buildings and the tenant.”

Located at 3100 Lomita Blvd. in Torrance, CA, the Torrance Technology Campus is 70% leased by two tenants, L-3 Communications and Torrance Memorial Medical Center. PMRG is a value-add buyer and Gregory says that this asset fits perfectly into its business strategy. “Leasing and extensive capital expenditures, however, are both required before the building is ready for the core market,” says Gregory. “Given our starting basis, the tenant specific nature of the property, our market knowledge and our ability to provide a much-improved experience to the tenant at below market rates, we believe we can deliver on our vision while providing a healthy return to our investors.”

To drive leasing at the property, PMRG will start by negotiating lease extensions and, if possible, expansions with the two current tenants. “Leasing our vacant space is of secondary concern,” says Gregory. “In fact, we programed almost 10% vacancy in our business plan.”

Once the investors complete the renovations and stabilize the property, it will turn it over to a long-term holder. We believe this is a perfect property for a long-term core buyer,” says Gregory.  “We are a value-added buyer and look to exit an asset once we believe maximum value has been realized. We do not plan on exiting this asset until we have completed our lease up strategy and an extensive capital expenditure strategy. The next buyer will likely be a long-term core holder.”