Bixby Sells Pacific Center, Stream Realty to Upgrade

Bixby Land, the Irvine, CA-based office and industrial real estate agency, announced last week that it had sold the eight-story Pacific Center in Torrance, CA for $68.5 million. Bixby bought the 291,000 square foot property from TA Associates for $52 million in July 2012, and invested $6 million into property renovations. This week the new owner, Stream Realty, secured a $49 million loan for the acquisition and further renovation of the office building, according to a GlobeSt.com article. Kevin MacKenzie, senior managing director at HFF, secured the funds on behalf of the borrower, along with HFF associate director Brian Torp.

The financing for the property is a non-recourse, four-year interest-only loan with a floating rate, funded through a national bank. "Through an extensive marketing process, there was significant interest generated across the capital spectrum due to the high quality of the asset, the strong office market trends in the south bay, and the experienced sponsorship," said MacKenzie.

When Bixby Land bought the building at 21250 Hawthorne Blvd. it was 63% occupied; their $52 million renovation program was intended to attract new tenants, with upgrades including removing land berms from around the building and putting in new landscaping with palms and olive trees and a furnished outdoor seating area. The building is now 80% leased with tenants including All Nippon Airways, Living Social, Morgan Stanley, Bank of America and Wells Fargo Insurance.

To bring the occupancy levels up higher, Stream plans to make further improvements to the lobbies and un-leased interior units, as well as for leasing concessions. According to Stream Realty's Colby Annett, the financing is a perfect fit for the company to carry out its business plan. "The quality of the asset combined with strong fundamentals in the market made the debt placement a smooth process," he told GlobeSt.com. With additional improvements, Bixby was able to bring the building occupancy up nearly 20% in less than two years with 55,000 square feet of leases signed.

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