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Harbor Associates Acquires San Bernardino, CA Office Portfolio for $41.7 MM
By: Harbor Associates
All five of the assets, ranging in size from 70,000 - 115,000 square feet, are located in the Tri City Corporate Center, a 153-acre master planned mixed-use office park with one million square feet of commercial office and 390,000 square feet of retail space. Tri City Corporate Center, which was developed in several phases between 1986 through 2008, also offers lush landscaped setbacks and green belts, wide streets, distinctive project signage and extensive public art. The portfolio benefits from its visibility, accessibility and transit-oriented location. The development fronts the San Bernardino (I-10) Freeway and is strategically located one mile from the Riverside (I-215) Freeway.
The portfolio, which is collectively 55% leased to 28 different tenants, represents the only block of contiguous office space of more than 75,000 square feet in the Inland Empire. Commercial office vacancy rates in the Inland Empire have been dropping dramatically and currently stands at 8.6%, lower than Los Angeles, Orange County or San Diego.
"The Inland Empire has a pretty dramatic supply/demand imbalance of large contiguous blocks of space," said Harbor Principal Paul Miszkowicz, "Moreover, the market hasn't seen any new office construction since 2009 in an environment where vacancy has dropped from 21.2% to 8.6% over the last six years. We think there's unmet demand in this space and look forward to executing on our lease-up strategy."
Harbor plans to re-position and lease-up the assets through a renovation program across the portfolio that includes upgraded building entries and lobby experiences, elevator improvements, new roofs, and replacement of the original HVAC units. The portfolio will debut rent-ready spec suites, EV charging stations, LED lighting retrofit along with new building and project signage.
Anthony Delorenzo, Todd Tydlaska, and Sammy Cemo of CBRE advised the seller in the off-market transaction. The acquisition was leveraged with short-term financing from a subsidiary of Granite Point Mortgage Trust Inc., which is externally managed by Pine River Capital Management L.P.
About Harbor: Harbor Associates, LLC (http://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. Harbor has been involved in the renovation, repositioning and development of 23 office projects totaling over 3 million square feet with a portfolio value in excess of $1.0B. The company is a joint venture with The Bascom Group, LLC.
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