WeHo developer Faring Capital buys City National Bank building in Long Beach for $47M
An investment and development firm that’s hyperactive in West Hollywood is taking a big leap into Long Beach.
Faring Capital just closed on the purchase of a 229,000-square foot Class A office tower at 100 Oceangate Street for $47 million, CEO Jason Illoulian told The Real Deal. It paid the seller, Steelwave, $205 a square foot for the property, which has views of the ocean.
Eastdil Secured’s Steve Somer and Mike Kathrein brokered the transaction.
Faring will modernize the building with a focus on utilizing courtyard space and common areas, Illoulian said.
“Long Beach is becoming a real live, work, play downtown, and we like the affordability aspect, he said. “This project would cost 3, 4, or 5 times more if it was an L.A. property.”
The building is 90 percent leased, with City National Bank — which has offices, signage and a storefront bank — as the anchor tenant. Other tenants include the city attorney’s office.
It is a high performing building for the area, where many office properties have struggled — so much so that several of them were converted to residential towers in recent years. The vacancy rate in Downtown Long Beach was 17 percent in the second quarter, according to a report by Transwestern — and it has hovered around that number for the past several years. Meanwhile, residential vacancy has been comparably tight in the walkable and relatively affordable beachside city, which has a wealth of restaurants and nightlife.
Steelwave made a significant profit on the City National Bank property, which it acquired for $38 million, or $167 a square foot, in 2005.
The $205 a square foot Faring paid was roughly on par with area averages in Long Beach. It is, however, an extreme discount to the pricing in West Hollywood, where the majority of Faring’s projects are based. In that city, a medical building traded in the first quarter for over $600 a square foot, and the Hustler store site traded for almost $900 a square foot.
Faring has been an aggressive developer in West Hollywood, across all property types. It is building 3 hotels, 1,000 residential units and a couple hundred thousand square feet of office and retail, Illoulian said. All of its projects are in Los Angeles County, with the vast majority in West Hollywood. It developed the Catch restaurant that just opened on the roof of 8711 Melrose Ave, and recently broke ground on a 50-condo complex on Doheny that has private elevator access and a bowling alley.