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THOUSAND OAKS, CA-Argus Realty Investors, a San Clemente-based tenant-in-common sponsor, has acquired the 159,137-sf Rancho Conejo R&D office complex from Fowler Properties Acquisitions of San Francisco for $31.8 million, or $200 per sf. The two-building complex, which is 94% occupied, is situated along the Ventura Freeway and houses biotech, bio-pharmaceutical and electronics tenants that include Amgen and Phillips Electronics.

The two class B buildings, at 1525 and 1535 Rancho Conejo Blvd., are located on a 14.2-acre site in Conejo Spectrum, the largest master planned business park in the Conejo Valley submarket. Argus acquired the Rancho Conejo buildings in a transaction that was brokered by Kevin Shannon of the South Bay office of CB Richard Ellis, who represented the seller.

Jean Murphy, SVP of acquisitions for Argus Realty, points out that the purchase price was “well below replacement cost with a class A location three minutes off the 101 Freeway on the border between Los Angeles and Ventura counties.” According to Shannon, replacement cost for the buildings would be “north of $300 per sf” if a developer could find a comparable parcel of land, which would be difficult because of the dwindling supply.

Besides biotechnology leader Amgen, which occupies 48,622 sf, tenants at Rancho Conejo include agricultural biotech company Ceres Inc. with 45,598 sf, clinical research firm Kendle International with 16,872 sf and Philips Electronics with 13,300 sf. Other tenants in the buildings, both of which were renovated extensively in 2000, include Caltrans with 9,552 sf.

The tenant roster at the buildings was one of the reasons the property appealed to Argus, according to Dick Gee, chairman and CEO of the San Clemente-based company. Gee says the tenants “mirror the industries that will continue their strong growth over the next 10 to 20 years.” Gee adds that those same industries “can draw on Conejo Valley’s large scientific, engineering and technical labor pool.”

In addition, demand for office and industrial space in the area is rising, according to Gary Wartik, manager of economic development for the City of Thousand Oaks. Wartik says that more than 650,000 sf of new office space is scheduled to open in the next 24 months, and developers are looking for more land. “There is less than 100 acres left to build on,” notes Wartik, who adds that Amgen alone is adding 1,000 new jobs a year.

Argus was one of multiple bidders on the property, notes Shannon, who calls the Conejo Valley “one of the strongest locations for investment capital today because there is very little land left that can be developed.” Argus financing for the deal included a 10- year-term, five-year interest-only $23.6 million fixed-rate permanent loan arranged by Brian Eisner of George Elkins Mortgage Banking Co. in Los Angeles.

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