Doom loop for offices? Not in Santa Monica, where a unit of JPMorgan Chase is poised to buy a 222,000-square-foot office building for $165.5 million.
New York-based J.P. Morgan Asset Management has agreed to buy the Pen Factory building at 2701 Olympic Boulevard, the Commercial Observer reported, citing unidentified sources. The seller is the California State Teachers’ Retirement System, based in West Sacramento.
The price works out to $745 per square foot.
The Class A offices are fully leased to video game publisher Activision Blizzard and health care company GoodRx, which both set up their headquarters there.
Activision subleased 90,000 square feet from Kite Pharma for its new hub, and GoodRx, known for its prescription apps, has its 130,000-square-foot hub at Pen Factory, which formerly housed a Papermate pen plant.
The single-story building with zany stripes was built in 1957, then renovated in 2017, according to Loopnet. It’s not far from Oracle’s Santa Monica campus and such companies as Yahoo, CBS, Hulu and Universal Music Group, according to the Observer.
The nine-figure deal by J.P. Morgan is a plus for a declining urban office market during a broad shift to remote work.
The pending deal for Pen Factory is more than three times higher than the average sale price of $231 per square foot this year across Greater Los Angeles, according to CommercialEdge.
Class A offices in Downtown Los Angeles recently sold for as low as $175 per square foot.
Last fall, J.P. Morgan Asset Management listed a 1.4 million-square-foot tech office property in Santa Monica for $1.4 billion. The 17-acre Water Garden at 1620 26th Street has eight six-story office buildings occupied by such tenants as Amazon.com and Sony.
— Dana Bartholomew
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