The State Compensation Insurance Fund has acquired a 158,785‑square‑foot Class A office tower at 35 N. Lake Ave. in Pasadena, joining a wave of mid‑size and large firms buying office assets as investors lose confidence and vacancy rates rise. The purchase reflects a broader shift from leasing to owning in downtown Los Angeles, signalling renewed market confidence. The insurer plans to renovate the nine‑story building, adding a conference and meeting space, occupy part of it as a regional hub, and lease the remainder to third‑party tenants.
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Please email studios@latimes.com. When the State Compensation Insurance Fund acquired the 158,785-square-foot Class A office building at 35 N. Lake Ave. in Pasadena, the nonprofit insurance carrier joined the ranks of several mid-sized and large companies that acquired office andover the past year. The acquisitions stem from wavering confidence from institutional investors as office and vacancy rates climb and pricing for high-quality assets resets lower.acquisitions across the region.
In areas such as Downtown Los Angeles, where major office buildings have been acquired by companies such as Capital Group, the trend is a sign that the market is stabilizing.
“We are seeing a meaningful shift from renting to owning in Downtown L.A. , and that’s one of the strongest signals that market confidence is returning. When occupants decide to buy their buildings, it tells us they believe pricing has reached a point of long-term value and that Downtown’s future is worth investing in.
Owner-user acquisitions do not happen in declining markets; they happen when users believe the bottom is in, and the next chapter is taking shape,” said Jessica Lall, managing director ofMoreover, these acquisitions can come with additional investments. For example, State Compensation Insurance Fund plans to renovate its property by adding aand meeting space that will be available to tenants.
It will occupy a portion of the nine-story building as a regional hub for its Southern California operations, with the remaining space available for lease to third-party tenants.
“Acquiring this building marks an important milestone for us, highlighting our efforts to optimize our real-estate footprint and underscoring our lasting investment in the area, our valued customers, and, above all, our Southern California employees,” said Andreas Acker, chief administrative officer at State Fund, in a statement. Brad Chelf, Ron Wade and Taylor Watson of CBRE represented the buyer in the transaction. JLL represented the seller, Swift Real Estate Partners. Swift Real Estate Partners will continue to manage the property.
For industrial properties, there was a spike in rents post-pandemic and asking rates could still be 50% higher than prior rental rates for tenants with expiring leases, while sale prices have slid due to lower overall demand due to a combination of high interest rates, tariffs and uncertainty among importers due to higher gas prices. That combination has led to some tenants acquiring their properties rather than renewing leases, as institutional investors look to realize a return on their investment.
, Future Foam acquired two buildings for $145 million last year at the expiration of its lease, totaling 417,000 square feet. The manufacturer had previously been a tenant at the building and acquired it from investment firm Principal Real Estate Investors. Other industrial transactions in Orange County include Robinson Pharma’s $40.7-million acquisition in Santa Ana. The supplement manufacturer acquired the 82,000-square-foot building from investor Hines to expand its manufacturing capacity.
China-based Jiaherb Inc. acquired a recently built warehouse in Brea for $53.7 million from Boston-based investment firm AEW Capital Management. Although there has been an uptick in owner-user acquisitions, there is an active leasing market for certain growing industries. Companies in thesector have leased more than 2.5 million square feet across Southern California as they obtain venture funding and scale production capabilities.
That includes Anduril’s announced 1.18-million-square-foot campus in“Long Beach has long been a naval and manufacturing city, with a history of building complex aircraft. Today, the next generation of companies is choosing to build and hire here again,” said Long Beach Mayor Rex Richardson, in a statement. David Nusbaum is a contributing reporter and research consultant to LA Times Studios. He covers all sectors of business in Southern California focused on local companies, commercial real estate deals and M&A transactions.
In addition, he compiles lists of the top banks, law firms, accounting firms and commercial real estate companies. His work has appeared in business publications nationwide including the Los Angeles Business Journal, Crain’s New York, Crain’s Cleveland, the Commercial Observer, and others. Banking & Finance
Office Acquisitions Owner‑User Purchases Pasadena Office Market Commercial Real Estate Trends State Compensation Insurance Fund
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