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5/29/20
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Omninet, a Beverly Hills-based venture capital firm, has acquired two L.A. area office properties in deals totaling $78 mil. The properties, Park Del Amo in Torrance and Commerce Plaza in the City of Commerce, were acquired from different sellers in separate, $39 mil transactions.
In Torrance, Omninet purchase the three-building, 204.5k sf ($191/sf) Park Del Amo from TA Associates in an off-market deal. Built in 1985, the campus is property is situated on 12.78 acres at 2355 and 2377 Crenshaw Blvd. The property is 92% occupied by multiple tenants including Keenan & Associates, which occupies 43% of the property and recently signed a five-year lease extension.
Park Del Amo is situated at the corner of Crenshaw and Sepulveda Boulevards and is equidistant to Los Angeles International Airport (LAX) and the Ports of Los Angeles/Long Beach. The campus is also near the 405, 110 and 91 freeways.
Newmark Knight Frank (NKF) Co-Head of U.S. Capital Markets Kevin Shannon, Executive Managing Director Ken White and Senior Managing Director Michael Moore represented TA Associates in the deal. Omninet was self-represented.
“The buyer was attracted to the asset’s central location, given its proximity to two major arterials and convenient access to the deep Central Torrance amenity base,” said Moore. “Additionally, the Palos Verdes Peninsula area offers abundant executive housing, which is a compelling draw for recruiting and retention of senior talent.”
Shannon added, “This sale price represents a substantial discount to replacement cost and a massive basis advantage compared to the adjacent El Segundo office submarket.”
The Greater Los Angeles office market showed a strong first quarter, even amid COVID-19, according to NKF’s 2020 1Q Los Angeles Office Market report. Torrance currently has no new office product under construction and has a low vacancy rate of 8.1% – the lowest within the South Bay market.
In the other deal, Omninet purchased Commerce Plaza, a two-building, 194.9k sf ($200/sf) office complex located at 5601 E. Slauson Ave and 5701 S. Eastern Ave, at the northwest corner of the intersection of Eastern and Slauson Aves in the City of Commerce. It sits just east of the 710 Fwy and also near the I-5.
Commerce Plaza is currently leased to 13 tenants including Waste Management, County of Los Angeles and DaVita Medical Management, among others. The County of Los Angeles plans to lease an additional 51.6k sf, which will bring the building to 100% occupancy.
Omninet Capital, which also owns Commerce Office Park, located directly across the street, repped itself in this transaction as well. NKF’s Shannon and White, along with NKF Senior Managing Director Scott Schumacher, represented the seller, Colony Capital.
"The current vacancy for this office submarket is one of the lowest in Los Angeles County as there are limited options for tenants seeking quality office space within the industrial-dominated Vernon/Commerce area,” said Shannon. "Commerce offers a superb credit tenant base with approximately 40% of the office product leased to Federal, State and County tenants in part due to the abundant free parking, central regional location and competitive occupancy costs, ultimately making it a desirable alternative to the downtown Los Angeles and Orange County office markets".
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