LONG BEACH, CA-One of the country’s largest healthcare providers has purchased the 461,263-square-foot Arco Center building in the downtown area of this harbor city in south Los Angeles County for $81 million. Molina Healthcare, which is headquartered nearby, is the largest tenant in the building.

Although the buyer did not return calls for further information by press time, people close to the transaction say the company wanted to control its occupancy costs while providing flexibility for future expansion.

“It’s like a user buying the building, rather than an investor,” says Ken Perry, chief investment officer for the Swig Co., the San Francisco-based seller. “They’ve been a tenant of ours for a number of years, and they are a quickly expanding company,” he adds. “They’re using the purchase to control their cost structure and provide expansion opportunities going forward. “

Kevin Shannon of CB Richard Ellis, who represented the seller in the transaction, says the sale was “great news for Long Beach and the beach cities.” Molina Healthcare is a major corporate presence, he adds. “This helps provide economic stability for the area.”  

The class A complex features a pair of connected 14-story buildings.  CBRE’s Shannon, Ken White, Scott Schumacher and Dave Smith represented the seller. The complex is currently 90% leased and has 22 tenants.

The sale comes at a time when Swig is actively looking for office buildings in Los Angeles County, according to Perry. The company announced the purchase of a small building in Pasadena in recent weeks, and reportedly has another property. One reason is the comparatively low cost of office buildings in L.A. as compared to the Bay Area.

“There’s price pressure in San Francisco and not many opportunities to buy,” he says. “Our hope is to continue to grow and maintain a platform in Southern California.”