Los Angeles County Signs 207,289-SF Office Lease in Long Beach
With tenant improvements, deal estimated at $167 million over 15 years
By Greg Cornfield December 14, 2023 2:00 pm
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The County of Los Angeles is the source of a lot of sudden office leasing before the end of 2023.
Officials signed a new 15-year lease for 207,289 square feet of office space in Long Beach with Omninet Capital, Commercial Observer has learned. The space will be used by the county’s Department of Public Social Services.
The estimated maximum first-year base rental cost is over $7.2 million, with a one-time rent concession of $249,461. The estimated lease cost, including tenant improvements, is $166.7 million over the 15-year term.
Records show Neil Kadisha’s Beverly Hills-based Omninet Capital acquired the asset for $69 million in 2012. The property at 1500 Hughes Way includes 513,520 square feet just west of the junction of the 405 and 710 freeways, according to PropertyShark.
The lease will be a highlight for L.A. County’s office market in the fourth quarter. Leasing activity was down 3 million square feet in the third quarter compared with the three months before, according to Savills’ most recent report. Activity remains largely nondiscretionary as most users have put growth on hold in the second half of the year.
Long Beach is one of the more affordable office markets in the region, with an average rental rate of approximately $2.67 per square foot per month, which is well below the county average of $3.86 per square foot. Long Beach’s availability rate — which measures the amount of space that’s vacant, soon to be vacant, or available for sublease — is almost at 26 percent, according to the same Savills report.
Gregory Cornfield can be reached at gcornfield@commercialobserver.com.
