San Bernardino County buys office building for $27M

Sellers Harbor and Taconic Capital grossed $28M on five-building flip

San Bernardino County Buys Office Building for $27M
From left: Harbor Associates' Joon Choi, Justin Loiacono, Paul Miszkowicz, Taconic Capital Advisors' Frank Brosens and 451 East Vanderbilt Way in San Bernardino (Harbor Associates, Taconic Capital Advisors, CBRE)

San Bernardino County has bought a 115,500-square-foot office building for $26.8 million.

The county, which had leased two floors on the premises, bought the four-story building at 451 East Vanderbilt Way, the Commercial Observer reported. The sellers were Harbor Associates, based in Seal Beach, and Taconic Capital Advisors based in New York.

The deal works out to $232 per square foot.

The property is the third and final sale of the partnership’s five-building portfolio at Tri-City Corporate Centre, a 153-acre office park in San Bernardino.

Harbor Associates and Taconic Capital Advisors bought the 368,000-square-foot portfolio in 2019 for $41.7 million, or $113 per square foot.

The partnership then revamped the buildings with new roofs, elevator upgrades and lobby makeovers before breaking apart the portfolio to sell each building separately, beginning in late 2021. The price of the renovation was not disclosed.

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That year, the partnership sold a building at 301 East Vanderbilt Way to Davenport Partners for $8.9 million, according to the Observer. It later sold three buildings at 621, 625 and 685 East Carnegie Drive to an undisclosed seller in November 2022 for $34.2 million. 

The entire portfolio sold for $69.9 million, or $190 per square foot  — for a profit of $28.2 million, not including renovation costs. CBRE advised the partnership in the sales.

Harbor Principal Paul Miszkowicz told the Observer that to get the best prices for offices after the pandemic requires breaking them into “smaller denominations,” which means piecing out real estate portfolios.

“The Inland Empire is really understated as a market, even though it’s one of the healthiest markets in Southern California,” Miszkowicz told the Observer. “A lot of that has to do with population, job and affordable housing growth in the area, but at the same time there has been very minimal office construction there in the last 15 years. That created an opportunity for us.”

Last month, Harbor Associates and F&F Capital Group bought a 164,700-square-foot distressed office building in L.A.’s Westwood section for $44.7 million — nearly 52 percent less than it traded for five years ago. The deal works out to $271 per square foot.

In November, Harbor Associates and Evergen Equity picked up four industrial buildings in Gardena for $55 million. The deal for the 126,000 square feet of warehouses on 7.5 acres works out to $436 per square foot, or $7.3 million per acre.

— Dana Bartholomew

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