Holland Partners Buys Multifamily Redevelopment in Long Beach
By Greg Cornfield February 24, 2022 7:35 pm
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Following increased demand for multifamily real estate, Holland Partners is planning to flip an office building in Long Beach, Calif., into a new housing development.
The Washington-based firm paid $41 million for Congressional Place, a two-story, 73,769-square-foot office building at 6700 East Pacific Coast Highway. It is located on a 2.53-acre parcel on the border of Seal Beach. Newmark (NMRK) announced the deal and represented the seller, ValueRock Realty, an Irvine-based real estate investment firm. ValueRock acquired the site for $24 million in 2017, records show.
“We greatly support the city of Long Beach’s vision of redevelopment and are excited to select Holland and Invesco to develop this property,” ValueRock’s Dennis Vaccaro said in a statement. “We saw this as an excellent opportunity to sell the property as a potential future residential development and it being the highest and best use for the community. We plan to 1031 exchange the proceeds into other Southern California locations.”
Next door, Onni Group is redeveloping the retail center next to Congressional Place into a multifamily community. They are adjacent to 2nd & PCH, a new high-end destination retail center delivered by CenterCal in the fall of 2019 that includes Whole Foods Market, Urban Outfitters, Lululemon and The Bungalow Kitchen by Michael Mina.
Investors have increased investments in multifamily properties while decreasing allocations to office assets over the past several years, according to Real Capital Analytics and Newmark research. Between 2006 and 2010, investors spent 22 percent of commercial real estate investment dollars on multifamily assets and 29 percent on office assets. As of 2021, average office investment declined to 13 percent while multifamily allocations rose to 39 percent, the highest of all major property types.
“Given the disparity between office and multifamily market fundamentals and favorable zoning, office is no longer the highest and best use of this [Long Beach] property,” said Newmark’s Anthony Muhlstein.
Muhlstein, along with Chris Benton, Kevin Shannon, Bill Bauman, Ken White and Sean Fulp represented the seller. It wasn’t immediately clear who represented the buyer.
Gregory Cornfield can be reached at gcornfield@commercialobserver.com.
