Dealmaker: Pacific Reach Properties Acquires L.A. Office Complex for $62M

Pacific Reach Properties, Vancouver, B.C., purchased Sherman Plaza, a two-building office complex on seven acres in Los Angeles.

The San Fernando Valley Business Journal reported Pacific Reach Properties paid seller Majestic Asset Management, Agoura Hills, Calif., $62 million for the 270,000-square-foot office complex.

Pacific Reach Acquisitions Director Vera Liu said the San Fernando Valley office market is strengthening and credit tenants currently occupy the building. “There is also future development potential on the excess land,” she said.

The deal marks the first U.S. office acquisition for Pacific Reach, which owns and manages 1,750 apartment units, 640,000 square feet of commercial space and 1,015 hotel rooms across Los Angeles, Phoenix, Toronto and Vancouver. Other Pacific Reach properties include National City Tower in downtown Los Angeles, Blu Apartments in Beverly Hills, Calif. and the Rosewood Hotel Georgia in Vancouver.

“This is a significant acquisition for Pacific Reach in Los Angeles, which has grown from a primarily Canadian-focused business to a major West Coast real estate player,” said Andrew Kirsh of law firm Sklar Kirsh LLP, Los Angeles. Sklar Kirsh represented Pacific Reach in this transaction. 

Newmark Knight Frank Capital Markets West Coast President Kevin Shannon, Executive Managing Director Ken White, Senior Managing Director Rob Hannan and Managing Director Brad Burton represented Majestic Asset Management in the transaction.

Shannon said Sherman Plaza is currently 99 percent leased with 90-plus-percent historical occupancy. “It is one of only three institutional-quality projects in Van Nuys, which is a lower-cost alternative for tenants as compared to the adjacent submarkets of Sherman Oaks and Encino,” he said. “That positioning made this a good opportunity to acquire a high-quality, stabilized asset at a significant discount to replacement cost.”