Harbor Associates makes two acquisitions for $56 mln total

Harbor Associates and Goldman Sachs Asset Management Private Real Estate have acquired Valencia, California-based The Commons, a two-building 156,628-square-foot office campus, for $33.1 million. And in a separate deal, Harbor and Blue Vista Capital Management have acquired Thousand Oaks, California-based Conejo Corporate Campus, a 198,478-square-foot low-rise office campus, for $22.9 million.


Long Beach, CA (February 19, 2018) — Harbor Associates, LLC has acquired suburban office developments in Valencia and Thousand Oaks, CA in two separate all-cash transactions totaling $56 million.

The acquisitions of Valencia Gateway and Conejo Corporate Campus expands the Long Beach-based investment firm’s office portfolio to more than one million square feet, approximately 90 percent located in suburban office markets.

“We continue to find compelling opportunities in suburban office locations that are out of favor with many institutional investors through our deep network of brokerage relationships and ability to move quickly and close all-cash,” said Harbor Principal Paul Miszkowicz.

In joint venture with Goldman Sachs Asset Management Private Real Estate (GSAM Pre), Harbor acquired The Commons at Valencia Gateway in Valencia, CA for $33.1 million. The two-building, 156,628-square-foot office campus sits on 10.25 acres at 25124-25125 Springfield Court. The campus is currently 81% leased to 15 tenants.

Harbor plans to renovate the common areas and build out new spec suites to provide a best-in-class workplace for the Santa Clarita Valley while implementing energy saving improvements like LED lighting EV charging stations. Upgraded gathering areas including an outdoor patio overlooking the adjacent Valencia Country Club golf course will be core elements of the asset repositioning strategy. The vacant office suites will receive new finishes throughout bring the suites into a more marketable condition.

“We believe that, despite the negative stigma surrounding the concept of suburban office, the fundamentals for certain properties in this sub-property type can be quite compelling,” said Joseph Sumberg, Co-head of GSAM PRE. “We are interested in pursuing other compelling opportunities to purchase best-in-class assets like the Commons at Valencia in fundamentally attractive suburban markets.”

“The recently approved 5,000+ homes approved at the Newhall Ranch, coupled with the Disney | ABC Studios at The Ranch’s 58-acre soundstage development will provide new demand drivers to what is already a fundamentally sound office submarket,” Miszkowicz, added.

Tom Bohlinger, Ryan Smith and Justin Hager of JLL represented the seller Barings in the transaction. Attorneys Albert Valencia and Elizabeth Dryden at Ervin Cohen & Jessup represented the Harbor-led joint venture in the legal part of the transaction.

“With each acquisition, Harbor continues to make an impact on the real estate landscape in Southern California,” said Ervin Cohen & Jessup Partner Albert Valencia who was lead attorney on the transaction. “We find pleasure in being a part of Harbor’s continued success.”

In a separate transaction Harbor in joint venture with Blue Vista Capital Management acquired the Conejo Corporate Campus, a 198,478-square-foot low-rise office campus in Thousand Oaks, CA for $22.9 million.

Originally built for Amgen in 2011, the campus features two low-rise office buildings on a 11.36-acre site at 2380 & 2400 Conejo Spectrum Street. One of the newest and most improved office projects in the submarket, Amgen invested more than $140 PSF in above-standard tenant improvements including numerous meeting and conference rooms, grand lobbies, a landscaped outdoor plaza, high speed fiber, and Venetian plastered walls. The project benefits above market 14-foot slab-to-slab ceiling heights and offers 4:1000 parking. The buildings have unobstructed mountain views to the East along with efficient and easily divisible floor plates.

Harbor plans to re-position the project into a Class-A multi-tenant office property with cutting-edge meeting and conference rooms onsite. While the asset’s high-quality improvements have been well maintained, the current single tenant layout is not geared towards the 5,000- to 25,000-square-foot tenant which dominates the office segment in the Conejo Valley office market. Harbor will proactively demise suites and re-engineer the building to accommodate tenants ranging in size from 8,000 to 100,000 square feet. The campus renovation plans include a new multi-color paint scheme, drought tolerant landscaping, and new project and tenant signage. In addition, Harbor plans on building an 11,000-square-foot spec suite that will showcase modern finishes and an open-plan layout.
Conejo Corporate Campus was 55% leased at closing.

Kevin Shannon and Scott Schumacher of Newmark Knight Frank represented the seller in the transaction. Pine River Capital Management was the external manager for the lender.

About Harbor: Harbor Associates, LLC (www.harborassociates.com) is a value-add operating platform focused on acquiring and repositioning under-performing commercial real estate assets throughout Southern California and Denver. The three Principals of Harbor collectively have over 30 years of experience in Denver and Southern California and collectively have closed over $1.7B in acquisitions and asset managed over $2.5B in assets totaling over 3M SF of office. The company is a joint venture with The Bascom Group, LLC.

About Goldman Sachs Asset Management Private Real Estate: GSAM PRE focuses on investing across all major property types spanning the risk and return spectrum, sourcing opportunities in primary and secondary markets. The group employs an active management approach, often partnering with operators or property managers to renovate and rebrand assets, including by implementing energy and operating efficiency programs to potentially realize cost savings. The group manages over $1.9 billion of real estate assets as of September 30, 2017 and is part of GSAM, one of the world’s leading investment managers with more than $1.2 trillion in assets under supervision globally as of December 31, 2017.

About Blue Vista Capital Management: Blue Vista was founded in 2002 in Chicago and is a proven industry leader in Middle Market real estate. The Blue Vista Middle Market equity strategy is executed through a series of value add funds which emphasize investments in assets where property income can be generated by targeting relative value opportunities in specific property sectors and markets, as well as undertaking value creation activities such as re-leasing, re-positioning, improved asset management, rehabilitation and development. Since inception, the Blue Vista Middle Market equity team has reviewed over 16,500 transactions and made over 150 investments valued at $5.4 billion in total capitalization.

About Pine River: Pine River Capital Management (www.pinerivercapital.com) is a global alternative asset management firm founded in 2002 that invests across multiple sectors, including commercial real estate, on behalf of various entities. Direct commercial real estate investments target first mortgage loans, mezzanine loans, b-notes and preferred equity on commercial real estate.

About Ervin Cohen & Jessup LLP: Ervin Cohen & Jessup LLP is a full-service firm that provides a broad range of business-related legal services including corporate law; litigation; intellectual property & technology law; real estate transactions and finance; land use and zoning; construction & environmental law; tax planning and controversies; employment law; health care law; bankruptcy, receivership and reorganization; and estate planning. For more information, visit [%22]http://www.ecjlaw.com/