Harbor Associates expands suburban office portfolio with USD56m of acquisitions
Harbor Associates has acquired suburban office developments in Valencia and Thousand Oaks, CA, in two separate all-cash transactions totalling USD56 million.
The acquisitions of Valencia Gateway and Conejo Corporate Campus expand the Long Beach-based investment firm’s office portfolio to more than one million square feet, approximately 90 per cent located in suburban office markets.
“We continue to find compelling opportunities in suburban office locations that are out of favour with many institutional investors through our deep network of brokerage relationships and ability to move quickly and close all-cash,” says Harbor Principal Paul Miszkowicz.
In a joint venture with Goldman Sachs Asset Management Private Real Estate (GSAM Pre), Harbor acquired The Commons at Valencia Gateway in Valencia, California for USD33.1 million. The two-building, 156,628-square-foot office campus sits on 10.25 acres at 25124-25125 Springfield Court. The campus is currently 81 per cent leased to 15 tenants.
Harbor plans to renovate the common areas and build out new spec suites to provide a best-in-class workplace for the Santa Clarita Valley while implementing energy saving improvements like LED lighting EV charging stations. Upgraded gathering areas including an outdoor patio overlooking the adjacent Valencia Country Club golf course will be core elements of the asset repositioning strategy. The vacant office suites will receive new finishes throughout bring the suites into a more marketable condition.
“We believe that, despite the negative stigma surrounding the concept of suburban office, the fundamentals for certain properties in this sub-property type can be quite compelling,” says Joseph Sumberg, Co-head of GSAM PRE. “We are interested in pursuing other compelling opportunities to purchase best-in-class assets like the Commons at Valencia in fundamentally attractive suburban markets.”
“The recently approved 5,000+ homes approved at the Newhall Ranch, coupled with the Disney | ABC Studios at The Ranch’s 58-acre soundstage development will provide new demand drivers to what is already a fundamentally sound office submarket,” adds Miszkowicz.
Tom Bohlinger, Ryan Smith and Justin Hager of JLL represented the seller Barings in the transaction. Attorneys Albert Valencia and Elizabeth Dryden at Ervin Cohen & Jessup represented the Harbor-led joint venture in the legal part of the transaction.
“With each acquisition, Harbor continues to make an impact on the real estate landscape in Southern California,” says Ervin Cohen & Jessup Partner Albert Valencia who was lead attorney on the transaction. “We find pleasure in being a part of Harbor’s continued success.”
In a separate transaction Harbor in joint venture with Blue Vista Capital Management acquired the Conejo Corporate Campus, a 198,478-square-foot low-rise office campus in Thousand Oaks, CA for USD22.9 million.
Originally built for Amgen in 2011, the campus features two low-rise office buildings on an 11.36-acre site at 2380 & 2400 Conejo Spectrum Street. One of the newest and most improved office projects in the submarket, Amgen invested more than USD140 per sq ft in above-standard tenant improvements including numerous meeting and conference rooms, grand lobbies, a landscaped outdoor plaza, high speed fibre, and Venetian plastered walls. The project benefits above market 14-foot slab-to-slab ceiling heights and offers 4:1000 parking. The buildings have unobstructed mountain views to the East along with efficient and easily divisible floor plates.
Harbor plans to re-position the project into a Class-A multi-tenant office property with cutting-edge meeting and conference rooms onsite. While the asset’s high-quality improvements have been well maintained, the current single tenant layout is not geared towards the 5,000- to 25,000-square-foot tenants that dominate the office segment in the Conejo Valley office market. Harbor will proactively demise suites and re-engineer the building to accommodate tenants ranging in size from 8,000 to 100,000 square feet. The campus renovation plans include a new multi-colour paint scheme, drought tolerant landscaping, and new project and tenant signage. In addition, Harbor plans on building an 11,000-square-foot spec suite that will showcase modern finishes and an open-plan layout.
Conejo Corporate Campus was 55 per cent leased at closing.