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Artesia Office Property Trades for $20.6 Million

Local Investors Increasingly Attracted to Suburban Office
February 12, 2018
A Brookfield Asset Management-sponsored private real estate fund just sold a four-story office building in Artesia for $20.64 million, or $216 per square foot.

The 95,605-square-foot Class A office building at 17100-17104 Pioneer Blvd. also has 13,000 square feet of retail. It was 94% leased at the time of the sale, according to CBRE Group, Inc, which represented the seller.

Angelus Institute, Kukdong Apparel America Inc. and La Mirage Restaurant are among the property’s tenants, according to CoStar data. The building, built 32 years ago is adjacent to the 91 Freeway.

Anthony DeLorenzo, a senior vice president at CBRE, said the unidentified local buyer was attracted to the suburban office property because of its "great stability."

"It was a high-net-worth individual who liked the quality of the building and the in-place cash flow and occupancy," DeLorenzo said.

Suburban office product in cities such as Artesia in southeastern L.A. County in the Cerritos submarket tends to attract such private buyers, according to DeLorenzo.

Mark Shaffer, a vice president at CBRE, agreed.

"Suburban office is uniquely appealing to high net-worth investors as they can buy a property at a deep discount to replacement cost, with good in-place cash flow, at rents that have not yet met or exceeded the previous peak, offering the potential for significant upside," Shaffer said in a statement.

Shaffer and DeLorenzo, along with Gary Stache, an executive vice president at CBRE, and Doug Mack, a transaction manager at CBRE, represented the seller. All are members of the firm’s Southern California investment properties team.

There has been increased activity in Artesia recently as the city has been working to make the area near Pioneer Boulevard more walkable, according to Rafael DeAnda, a CoStar market analyst.

A redevelopment project along Pioneer Boulevard has also been in the works.

"Cerritos has fantastic demographics for office tenants from which they can find highly-skilled, highly-educated workers," DeAnda said. "Over half of the population over 25 has a bachelor’s degree, and over a third of those have a graduate or professional degree."
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