The Port of Lengthy Seaside has continued to plant roots downtown with the acquisition of an workplace tower.
The port spent $36 million to purchase the property at 100 Oceangate, a 13-story constructing throughout the road from the port’s headquarters and fewer than a 10-minute drive from the port.
The acquisition comes because the workplace emptiness charge in downtown Lengthy Seaside reaches an all-time excessive of 35%, in keeping with knowledge from the Downtown Lengthy Seaside Alliance.
“It’s a great time to purchase,” Port of Lengthy Seaside chief govt Noel Hacegaba mentioned in an interview. “This acquisition is a strategic funding to drive financial growth for Lengthy Seaside and a possibility to create a maritime enterprise hub. It displays our confidence within the port’s future.”
The constructing has an occupancy charge of round 70% — leases that the port will inherit and generate profits from. The port will fill the accessible area with worldwide delivery and logistics corporations, producers and different trade-related companies.
“Their cargo already crosses our docks, and this can be a manner for us to supply them a house,” Hacegaba mentioned.
The constructing additionally shall be residence to Port U, the port’s inner coaching and profession growth program.
The acquisition has been a months-long course of, with the port getting into right into a sale and buy settlement on July 27. Hacegaba mentioned the transfer helps Lengthy Seaside Mayor Rex Richardson’s financial growth technique dubbed AnchorLB, which the mayor introduced in January.
AnchorLB is designed to draw worldwide corporations, together with shippers and producers, to downtown workplace areas.
“I referred to as on the port to companion with me,” Richardson mentioned in an interview. “AnchorLB is the following step to maneuver our economic system from being a spot the place items transfer by way of to being a spot the place selections are made.”
The tower was in-built 1972 and offered in 2016 to the actual property agency Faring for $46.5 million, in keeping with CoStar. Totaling 225,486 sq. toes, the constructing was valued at $54.3 million final yr, however the Los Angeles County assessor wrote down the worth by 47% to $24.9 million this yr.
Workplace vacancies have been hovering throughout Southern California, reaching round 20% general within the larger Los Angeles space within the second quarter this yr, in keeping with actual property agency Avison Younger. The autumn in workplace occupancy has been spurred by everlasting shifts to distant work, rate of interest spikes and a pattern of corporations transferring into smaller, extra high-end buildings.
“The arrival of e-commerce and make money working from home takes the demand away from workplace area, so one of many methods we’re exploring is to leverage our proximity to the port to create extra demand,” Richardson mentioned.
Occupant companies are seizing the chance to grow to be homeowners, particularly in downtown Los Angeles, the place glittering high-rises have plummeted in worth since occupancy dropped in the course of the pandemic.
Workplace customers from the general public sector are among the many patrons. The town of Los Angeles plans to purchase a 35-story tower downtown to be used by the Division of Water and Energy.
Manulife U.S. Actual Property Funding Belief mentioned in April that it will promote its high-rise at 865 S. Figueroa St. for $92.5 million pending approval from Los Angeles officers. It has an assessed worth of $248 million.
One other main public purchaser of a downtown workplace constructing was Los Angeles County, which in 2024 purchased Fuel Co. Tower for $200 million, a steep drop from its $632-million valuation in 2020. County officers mentioned on the time that the foreclosures sale was too good to cross up.
Hacegaba mentioned the port’s constructing buy is the primary of its sort.
“It’s the primary time any port authority that I’m conscious of has accomplished one thing like this,” he mentioned. “There’s a enterprise case for why we wanted to put money into the constructing, and if you mix that with the present state of the business actual property sector, it simply is smart for us to make this strategic funding occur.”
A number of the constructing’s occupants work within the maritime trade, together with engineering and legislation companies, Hacegaba mentioned. It’s additionally residence to Metropolis Nationwide Financial institution, and an pressing care middle and a Crunch Health.
“Our plan with the vacant flooring is to prioritize workplace area for the port’s companions, and one other portion of it will likely be used for our personal functions to coach our workforce,” Hacegaba mentioned. “It’s a possibility for us to make sure that we’re investing in tomorrow’s workforce on this facility that’s actually proper subsequent door to the port.”
The port’s new tower additionally may put together the town to assist host the Olympic Video games in 2028. The Lengthy Seaside Conference Middle is internet hosting handball, water polo and different occasions, whereas seashore volleyball shall be held at Alamitos Seaside, and open water swimming and crusing shall be at Belmont Shore.
“Lengthy Seaside as a metropolis goes to be on the world stage, and that’s going to generate quite a lot of foot site visitors from a few of our worldwide companions,” Hacegaba mentioned. “Having area accessible that might be activated in the course of the Olympic Video games may entice among the international locations whose groups are taking part.”
