A 20-story office tower in Downtown Long Beach has sold for $85.5 million, signaling interest in its struggling office market.
Parallel Capital Partners sold the 410,920-square-foot Shoreline Square building at 301 E. Ocean Blvd. to Shoreline Square Holdings, the Los Angeles Business Journal reported.
The San Diego-based real estate investment firm bought the property in 2014 for $102 million.
Newmark Group’s Kevin Shannon, Ken White, Rob Hannan and Laura Stumm represented the seller.
The 34-year-old office tower next to the Westin Long Beach is 92-percent leased. Of its occupants, more than half are U.S. government and Long Beach municipal tenants.
“Downtown Long Beach has seen over $2 billion in investment over the last decade and has a robust future commercial and residential development pipeline,” Stumm said in a statement. “Corporations and government tenants alike have recognized the relative value that this market provides, as reflected by the tenure of the tenancy at Shoreline Square.”
Nonetheless, the Downtown Long Beach office market has been as depressed as other office markets in Los Angeles County during the pandemic.
In the fourth quarter of last year, it saw a vacancy rate of 25.6 percent, up from 21.8 percent in the previous year and higher than the county average of 20.2 percent, according to data from Jones Lang LaSalle Inc. That was down from a 10-year-high of 24.4 percent vacancy in the third quarter.
The Long Beach market is much cheaper than the average office market in Los Angeles County.
In the fourth quarter, JLL reported an average asking rate of $2.73-a-square foot for Class A office space in Downtown Long Beach, compared to an average of $4.13 a square foot across the county. In Los Angeles, the Westside leads the office recovery.