Port of Long Beach buys downtown office tower as | Real Estate news

The Port of Long Beach has continued to plant roots downtown with the acquisition of an office tower.

The port spent $36 million to buy the property at 100 Oceangate, a 13-story building across the road from the port’s headquarters and less than a 10-minute drive from the port.

The buy comes as the office emptiness charge in downtown Long Beach reaches an all-time high of 35%, according to data from the Downtown Long Beach Alliance.

“It’s a good time to buy,” Port of Long Beach chief govt Noel Hacegaba said in an interview. “This acquisition is a strategic investment to drive economic development for Long Beach and an opportunity to create a maritime business hub. It reflects our confidence in the port’s future.”

The building has an occupancy charge of around 70% — leases that the port will inherit and make money from. The port will fill the out there space with worldwide delivery and logistics firms, producers and other trade-related corporations.

“Their cargo already crosses our docks, and this is a way for us to offer them a home,” Hacegaba said.

The building also can be home to Port U, the port’s inner training and profession development program.

The acquisition has been a months-long course of, with the port getting into into a sale and buy settlement on July 27. Hacegaba said the transfer helps Long Beach Mayor Rex Richardson’s financial development strategy dubbed AnchorLB, which the mayor announced in January.

AnchorLB is designed to entice worldwide firms, including shippers and producers, to downtown office areas.

“I called on the port to partner with me,” Richardson said in an interview. “AnchorLB is the next step to move our economy from being a place where goods move through to being a place where decisions are made.”

The tower was constructed in 1972 and bought in 2016 to the real estate firm Faring for $46.5 million, according to CoStar. Totaling 225,486 sq. ft, the building was valued at $54.3 million last yr, but the Los Angeles County assessor wrote down the worth by 47% to $24.9 million this yr.

Office vacancies have been hovering across Southern California, reaching around 20% total in the better Los Angeles space in the second quarter this yr, according to real estate firm Avison Young. The fall in office occupancy has been spurred by everlasting shifts to distant work, rate of interest spikes and a development of firms shifting into smaller, more high-end buildings.

“The advent of e-commerce and work from home takes the demand away from office space, so one of the strategies we’re exploring is to leverage our proximity to the port to create more demand,” Richardson said.

Occupant companies are seizing the chance to change into homeowners, particularly in downtown Los Angeles, where glittering high-rises have plummeted in worth since occupancy dropped during the pandemic.

Office customers from the public sector are among the patrons. The metropolis of Los Angeles plans to buy a 35-story tower downtown for use by the Department of Water and Power.

Manulife U.S. Real Estate Investment Trust said 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.

Another major public purchaser of a downtown office building was Los Angeles County, which in 2024 purchased Gas Co. Tower for $200 million, a steep drop from its $632-million valuation in 2020. County officers said at the time that the foreclosures sale was too good to go up.

Hacegaba said the port’s building buy is the first of its type.

“It’s the first time any port authority that I’m aware of has done something like this,” he said. “There’s a business case for why we needed to invest in the building, and when you combine that with the current state of the commercial real estate sector, it just makes sense for us to make this strategic investment happen.”

Some of the building’s occupants work in the maritime industry, including engineering and law corporations, Hacegaba said. It’s also home to City National Bank, and an pressing care heart and a Crunch Fitness.

“Our plan with the vacant floors is to prioritize office space for the port’s partners, and another portion of it will be used for our own purposes to train our workforce,” Hacegaba said. “It’s an opportunity for us to ensure that we are investing in tomorrow’s workforce in this facility that’s literally right next door to the port.”

The port’s new tower also may put together the town to help host the Olympic Games in 2028. The Long Beach Convention Center is internet hosting handball, water polo and other occasions, while seashore volleyball can be held at Alamitos Beach, and open water swimming and crusing can be at Belmont Shore.

“Long Beach as a city is going to be on the world stage, and that’s going to generate a lot of foot traffic from some of our international partners,” Hacegaba said. “Having space available that could be activated during the Olympic Games could attract some of the countries whose teams are participating.”