By Kelsi Maree Borland
LOS ANGELES—The investor buys the Gateway Corporate Center in Diamond Bar, saying the market and surrounding markets, like Pomona and West Covina, are “historically very stable.”
Buchanan Street Partners has purchased the Gateway Corporate Center in Diamond Bar from Cornerstone Real Estate Advisers, an affiliate of an institutional buyer. The sales price was not disclosed, however, sources unrelated to the deal say that the investor purchased the property from $44 million. While this is Buchanan’s first Diamond Bar purchase, it knows the surrounding areas well and was attracted to the purchase for the strong location.
“This submarket is historically very stable and remains well occupied relative to other submarkets in Los Angeles, and we think that is largely a function of its central location and the ability of employers to draw employees from a lot of different areas surrounding this property, whether it is from L.A. County, Orange County or the Inland Empire,” Chris Herthel, SVP at Buchanan Street Partners, tells GlobeSt.com. “That is what initially attracted us and we don’t think that will change in the future. We have been active in this market, and we will continue to look for additional opportunities.”
Buchanan Street focuses on the second-tier market, where Herthel says that they can buy below replacement cost with less competition than more primary Los Angeles markets. “We are very active in mid-market properties when it comes to size, so that is anywhere from $30 million to $50 million in high-quality office properties throughout the US,” he adds. “This property fits that profile perfectly. It is a good size, and it is best in class in a good infill stable market that produces consistent cash flow out of the box. There are some improvements to be made as well, whether it is through renovation or a little bit of lease up. This property really checks all of those boxes.”
The property is in good condition and has been institutionally owned and maintained. It has 94% occupancy, so there is some upside with room for additional leasing and to push rents. Herthel says that the may also do some light renovations to the lobby and other common areas as well as the building systems. The investor will hold the property in the medium term, as is typical for its investment strategy.
Jeff Cole and Ed Hernandez of Cushman & Wakefield represented both the buyer and the seller in this transaction.