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ACCO Buys New Pasadena HQ for $112M

Firm Will Relocate HQ from Glendale, Occupy More than Half of the 235,000-SF Office Building
January 31, 2018
ACCO Engineered Systems bought the former OneWest Bank headquarters building in Pasadena for a reported $112 million this week.

The mechanical engineering firm acquired the 235,000-square-foot, six-story property at 888 E. Walnut St. from JP Morgan Chase & Co., according to sources familiar with the deal. ACCO plans to move and expand its headquarters from Glendale to occupy about 130,000 square feet at this location.

"It is very significant for Pasadena to have acquired another headquarters," said Bill Boyd, senior director at Charles Dunn Co. Inc. in Glendale, who also said the removal of such a large block of space will be a boon for the market.

Pasadena had the highest office vacancy of the Tri-Cities last quarter at 15.8 percent after giving back more than 80,000 square feet during the quarter, according to Transwestern. The space absorption should help quell the recent increasing vacancy trend.

The sale price has not been disclosed but industry sources estimate it at approximately $112 million, or about $477 a square foot. Similar Pasadena office buildings sold in the last year averaged around $400 to $440 a square foot, according to CoStar information.

JP Morgan bought the property for $127 million, or about $543 a square foot, in 2007 from developer IDS Real Estate Group.

Sources said the building sold at a slight discount due to the fact that it had 190,000 square feet of vacant space after former lead tenant OneWest Bank moved out in the first quarter of last year. The bank was acquired by CIT Group Inc. for $3.4 billion in 2015 and eventually no longer needed the space.

ACCO will be moving from its 60,000-square-foot headquarters at 6265 San Fernando Road in neighboring Glendale.

The firm had been searching for a Class A office building in which to expand its headquarters in the Tri-Cities market. At one point, ACCO had the former Avery Dennison campus at 150 N. Orange Grove Blvd. in Pasadena under contract but backed out due to undisclosed disagreements over the deal. Doheny Eye Institute eventually bought that 115,000-square-foot property for $50 million, or $434 a square foot, in November.

The high vacancy made the Walnut Street building a prime opportunity for ACCO, which made an off-market offer to the sellers.

ACCO will join tenants CenFed Bank, Citibank and OpenX in the building, which posts asking rates of about $3.65 a square foot.

The seller was represented by Shaun Stiles at Cushman and Wakefield who could not be reached for comment. The buyer was represented by Cresa's Ray Howden and Seth Wellisch, who declined to comment.

Please refer to CoStar Comp # 4122945 for more information on this sale.

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