Lincoln Property Company purchased a five-story Manhattan Beach office building on the Rosecrans Avenue corridor with multifamily redevelopment plans.
The Dallas-based firm paid $70 million, or $569 per square foot for the 123,000-square-foot building.
The seller is Continental Development Corporation; the firm’s president of development, Alex Rose, signed the grant deed dated mid-October. The deal involved $45 million in seller financing, according to a deed of trust signed by Southern California Lincoln Property executive Rob Kane.
Berkadia’s Brett Betzler brokered the deal and said the offices will be demolished and replaced with apartments. Representatives for the buyer and seller did not immediately respond to a request for comment. Continental’s Rose declined to comment.
The office property at 1500 Rosecrans Avenue is near Manhattan Village, a shopping mall, and many other retail spots and restaurants. It’s part of a commercial center that spans parts of El Segundo and Manhattan Beach.
The Beach Cities office submarket, which encompasses Manhattan Beach, Hermosa Beach and Redondo Beach, has a 15 percent vacancy rate. That is lower than all of South Bay’s 23.5 percent vacancy rate, according to CBRE — and far lower than downtown Los Angeles’ 33.3 percent, which has the lion’s share of office distress.
But the average Manhattan Beach home value is $3 million, according to Zillow, and the average rent is $5,500 a month.
The deal is pricey: In South Bay, the most expensive office sale recorded in the third quarter was an $18 million trade in Carson, and the next was less than $10 million in El Segundo, per CBRE. Though those sold for $1,021 and $774 per square foot, respectively.
For context, Tishman Speyer’s $205 million sale of the Maple Plaza building in Beverly Hills to Kilroy Realty, one of the year’s biggest office deals, amounted to $707 per square foot.
It’s the latest Lincoln Property office deal in Los Angeles. The firm secured a $197 million acquisition loan from Blackstone Group last year to finance its purchase of the Bluffs at Playa Vista, an office complex at 12181 Bluff Creek Drive.
It paid $187.5 million, or $375 per square foot, for that 500,000-square-foot campus, with no plans for a residential play. However, the company tweaked its plans earlier this year for a mixed-use apartment complex in Culver City, nixing offices for more housing.
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