Newmark Knight Frank (“NKF”) has announced the sale of Pacific Gateway, a 237,145-square-foot, Class A office tower situated in the heart of Los Angeles’ South Bay for an undisclosed amount.
NKF’s Co-Head of U.S. Capital Markets Kevin Shannon, Executive Managing Director and Agency Market Leader Bill Bloodgood, Executive Managing Director Ken White, Senior Managing Director Scott Schumacher and Associate Aly Chelf represented the undisclosed seller. The private buyer was self-represented.
Located at 19191 S. Vermont Avenue in Torrance, the 10-story office tower sits adjacent to the intersection of the San Diego (I-405) and Harbor (I-110) freeways and is part of the 190th Street office submarket in South Bay. The building, which is nearly 84 percent leased, recently underwent a $6 million renovation including an upgraded lobby designed by Gensler, new corridors, a new tenant amenity center and exterior improvements that include outdoor meeting and dining areas. The project’s rent roll includes a strong mix of tenants such as Optum Care (formerly DaVita Medical Group) and Farmers Insurance Federal Credit, among others.
“The 190th Street Market has experienced tremendous leasing momentum and rental growth and has seen significant redevelopment of several prominent assets including the adjacent approximate 20,000-square-foot retail center, The Enclave, currently under construction by The Ruth Group,” said Shannon.
Schumacher added, “El Segundo tenants have seen their rates increase by approximately 25 percent in the past three years and have embraced the 190th Street market as a viable proximate alternative to relocate with comparative occupancy cost savings of almost 40 percent.”
The South Bay as a whole benefits from its beach communities, executive housing, outstanding amenities, quality schools and proximity to LAX, which is the third busiest airport in the world. For companies, the region will continue to appeal to office tenants priced out of West Los Angeles, and, with this migration, rents will increase, according to NKF Research. This is especially true in periods of economic expansion.
Vacancy in the Greater Los Angeles office market was unchanged from one year ago during the second quarter, even amid COVID-19, according to NKF’s 2Q20 Los Angeles Office Market report. As of 2Q20, the 190th Street Corridor has no new office product under construction and presents a 15.7 vacancy rate.
About Newmark Knight Frank
Newmark Knight Frank (“NKF”), operated by Newmark Group, Inc. (“Newmark Group”) (NASDAQ: NMRK), is one of the world’s leading and most trusted commercial real estate advisory firms, offering a complete suite of services and products for both owners and occupiers. Together with London-based partner Knight Frank and independently-owned offices, NKF’s 18,800 professionals operate from approximately 500 offices on six continents. NKF’s investor/owner services and products include investment sales, agency leasing, property management, valuation and advisory, diligence, underwriting, government-sponsored enterprise lending, loan servicing, debt and structured finance and loan sales. Occupier services and products include tenant representation, real estate management technology systems, workplace and occupancy strategy, global corporate services consulting, project management, lease administration and facilities management. For further information, visit www.ngkf.com.
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