A real estate investor that specializes in distressed assets bought an eight-acre commercial office campus in Monterey Park from Blue Shield of California for $15 million.
BH Properties announced the purchase on Tuesday.
Blue Shield of California, the Oakland-based health insurance company, currently uses the campus as the headquarters of its Promise Health Plan. Under the terms of the deal the nonprofit will continue to occupy the space through next July.
The leaseback “created a win/win scenario for both parties,” Andrew Van Tuyle, an executive with BH Properties, said in a release.
Van Tuyle indicated that the firm’s longer-term plans are unclear.
“Having Blue Shield as a tenant for the next year,” he added, “will give us time to evaluate our plans to reposition this very attractive and highly accessible asset.”
That asset includes two three-story buildings that total roughly 121,000 square feet. The property is located at 601 Potrero Grande Drive, near the state highway California 60 about 15 miles east of Downtown L.A.
The sale price comes out to $125 per square foot — a lower figure than some other recent Southern California office deals. TRD reported this week that Cedars Sinai recently paid $38 million, or $509 per square foot, for a 74,000-square-foot office building adjacent to one of its affiliated hospitals in Torrance. In February, the logistics giant Prologis paid $96 million, or $298 per square foot, for a 24-acre office park in Orange County, and in March Rexford Industrial Realty paid $42 million, or around $181 per square foot, for an office park in the San Fernando Valley.
The deal was yet another acquisition for BH Properties, a major commercial real estate investor based in West L.A. The firm, which two years ago launched a $200 million fund to capitalize on distressed assets, owns dozens of properties across the country, including recent acquisitions of an office building in Houston, a shopping center in the L.A. County’s Temple City and a retail center in Miami Beach.
A report published in April found that office vacancies in L.A. continue to rise, although a UCLA Anderson forecast from this spring found that investors and developers remained bullish on the region’s office and retail markets.
Blue Shield of California has nearly 7,000 employees and 18 campuses throughout the state, including the Monterey Park site.