Harbor Associates Makes a Multifamily Pivot on San Pedro Project
The value-add office investor has sketched out plans to convert the SoCal office building into apartments and live-work units
Harbor Associates, a Long Beach-based office investor that’s been on an acquisition spree, is experimenting with a mixed-use conversion in an opportunity zone along the waterfront in Los Angeles’ South Bay.
The firm filed plans to convert a 292,540-square-foot office property in San Pedro into a mixed-use development with 228 apartments and live-work units, according to Urbanize Los Angeles. The plan also calls for 15,000 square feet for new retail, which would add to the 13,244 square feet of existing retail space.
The Class A property, called the Topaz Building at 222 West 6th Street, is currently about 67 percent leased to tenants like World Logistics Service USA and Poma Retail Development, according to tenant leasing records.
Multifamily investment is a bit of a departure from the modus operandi for Harbor Associates, which traditionally develops and repositions office properties. Its current projects include the renovation of two properties with 365,000 square feet in downtown Anaheim and Laguna Niguel, which it purchased for a combined $80 million in October. Harbor Associates and Taconic Capital are also repositioning five office properties with 368,000 square feet in the Inland Empire after a $41.7 million trade that also took place in October.
Harbor Associates did not respond to requests for comment.
The firm purchased the San Pedro property for $43.5 million from Jupiter Holdings in October, with the deal supported by $33.7 million in financing from GP Commercial Investment Corp., property and grant deed records show. Jupiter had picked up the property for $21.5 million in late 2012 and invested more than $10 million in renovations.
The building opened almost 30 years ago, and has housed major defense contractors like Logicon and Northrop Grumman, which left the property in 2010. Current listings for vacant space show asking rents at about $2 per square foot.
The South Bay, which includes the booming El Segundo market, was home to about 20 percent of the total vacant office space in Greater Los Angeles in the third quarter of 2019, according to CBRE’s most recent office report. However, the neighborhood has seen a growing number of projects with multifamily components.
The 1.7-acre lot, located in the southernmost part of Los Angeles next to Long Beach, is located within a federally designated opportunity zone, which allows investors to put capital gains back into real estate projects. It’s adjacent to Holland Partner Group’s 375-unit, mixed-use development, 550 Harborfront.
The Ratkovich Company and Jerico Development are also working on the nearby $150 million San Pedro Public Market redevelopment, where the former Ports O’ Call Village retail property was located. That 42-acre project is set to break ground next month and will open in 2021 with restaurants, retail and event space on the waterfront.