One of the largest new leases in last five years in South Bay
Los Angeles – March 2 – CBRE Group, Inc. announced a nearly 100,000 square-foot office lease to Molina Healthcare in San Pedro, California. It is one of the largest new office lease transactions in the South Bay in the past five years.
Molina, a Fortune 500 company and major healthcare provider, signed the 99,343 squarefoot agreement at the Topaz office tower at 222 West 6th Street as part of its relocation of one of its business units out of Long Beach and into San Pedro.
Molina Healthcare was attracted by the large block of contiguous space with efficient floor plates, the high quality of the repositioned asset, ocean views from all floors, numerous walkable amenities, and proximity to its Downtown Long Beach headquarters.
Other recent leasing activity at Topaz include the Port of Los Angeles, Marymount California University, Regus, AltaSea, the City of Long Beach, and Procel.
CBRE’s Tim Vaughan, Dave Smith and Mike Harry represented the landlord, Jupiter Holdings LLC. Jamie Keller and Dan O’Leary from McKinney Advisory Group represented Molina.
The 11-story Topaz building was originally constructed in 1991 for Logicon, an aerospace company, to be the anchor tenant. Subsequently, Northrop purchased Logicon and remained
in the building through 2010. Newport Beach-based Jupiter Holdings purchased the property in January 2013 with a plan to upgrade and revamp the asset.
“Our purchase and repositioning of Topaz was done with the intent of identifying a large office user that would appreciate the quality of the building and the numerous benefits of being in the San Pedro community,” said Ed St. Geme, CEO of Jupiter Holdings. “Molina Healthcare is the perfect tenant to become the anchor, not only of Topaz, but of the entire community.”
San Pedro sits within the City of Los Angeles. The Port of Los Angeles is partially located within the community and has been a main economic driver for the region. Despite economic and population growth that outpaces the City of LA, San Pedro hasn’t always been thought of as a major office market. However, demand has been consistent since 2014, and new leasing from tenants has driven the vacancy rate down 620 basis points, according to CBRE research. Renter demand for apartment units is also robust, and the current vacancy rate in the market is just 3.6 percent.
“San Pedro is currently undergoing a major rebirth as tenants in surrounding markets reevaluate the area with real interest,” said CBRE’s Vaughan. “A wide spectrum of affordable residential options, supporting retail, and the anticipation of more to come as the Port of Los Angeles makes major investments to improve the waterfront area, are all contributing to the
growth. The Molina lease is a significant indicator of the benefits of the San Pedro waterfront, and it’s telling of all that is happening in this area.”
The Ratkovich Company in partnership with Jericho Development is getting close to starting construction on the Ports O’ Call site. The project will turn into a major retail destination that
will benefit all the surrounding office and residential properties. The planned AltaSea campus is another development that has provided a boost in focus and investment in the area.
“We are thrilled to have a quality company such as Molina Healthcare recognize the advantages of San Pedro by becoming the major office tenant in the market,” said City of Los Angeles 15 District Councilman Joe Buscaino. “We anticipate the growth to accelerate as more companies relocate to this area.”
Adds Jodie Poirier, managing director, overseeing the CBRE’s South Bay office, “CBRE has been privileged and proud to work with the City of Los Angeles and Joe Buscaino, who has supported this effort and been integral in helping to create an inviting environment for such high-caliber employers such as Molina.”
About CBRE Group, Inc.
CBRE Group, Inc. (NYSE:CBG), a Fortune 500 and S&P 500 company headquartered in Los Angeles, is the world’s largest commercial real estate services and investment firm (based on 2016 revenue). The company has more than 75,000 employees (excluding affiliates), and serves real estate investors and occupiers through approximately 450 offices (excluding affiliates) worldwide. CBRE offers a broad range of integrated services, including facilities, transaction and project management; property management; investment management; appraisal and valuation; property leasing; strategic consulting; property sales; mortgage services and development services.
About Jupiter Holdings LLC
Jupiter Holdings LLC is a Newport Beach, California-based private investment firm specializing in alternative investments and the pursuit of superior absolute returns. Founded in 1997 by Edmond F. St. Geme, Jupiter is backed by more than $1 billion of discretionary institutional capital and is highly opportunistic in its pursuit of extraordinary risk-adjusted returns in three primary areas: real estate, private equity, and marketable securities.
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