Urban Stearns and Forbix have secured a $17.5 million loan to begin converting a 12-story office building in San Pedro into more than 200 homes.
The Culver City- and Calabasas-based investors secured the bridge loan to launch construction of the 294,000-square-foot office-to-home conversion at 226 West Sixth Street, Bisnow and the Torrance Daily Breeze reported.
Lenders BH3 Management and F2 Capital provided the financing for pre-development costs associated with the adaptive reuse project. Terms of the loan were not disclosed.
Urban Stearns and Forbix bought the former Logicon and Northrop Grumman building in March last year for $28.9 million. The sellers were Long Beach-Based Harbor Associates and Platform Ventures, which purchased it in 2019 for $43.5 million, then walked its way through its conversion approvals.
The two-tower property, built in 1990, takes up a full city block and includes 30,000 square feet of ground-floor shops and restaurants, with parking for 650 cars.
Plans for the so-called Topaz Tower would convert the offices into 244 studio, one- and two-bedroom apartments. It would include outdoor balconies with ocean views and a rooftop deck with a resort-style pool. Units will average 839 square feet.
The project is expected to be completed late next year.
The building is two blocks from the 42-acre West Harbor waterfront redevelopment, now under construction. Both the new building and West Harbor are expected to open in 2025.
The planned office-to-apartment conversion is in keeping with current trends since a broad shift to remote work, though few projects have been completed, according to Jonathan Fhima, CEO of F2.
While such conversions can be challenging to execute, they are not impossible, according to Bisnow.
Greater Los Angeles had 2,442 office-to-home conversion units planned for this year, up 6 percent from last year, according to a RentCafe report.
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Jamison Services, a leading developer of office-to-home conversions, wants to turn the former ARCO tower in Downtown Los Angeles into apartments. The Koreatown-based company filed plans to convert the 33-story office building at 1055 West 7th Street into 691 apartments.
Last month, Jamison filed plans to convert the 19-story Los Angeles Superior Court Tower at 600 South Commonwealth Avenue into 428 homes.
— Dana Bartholomew