SANTA MONICA, CA-The sale of the iconic Clock Tower building here is yet another example of west side creative office space commanding a premium price, says a prominent CBRE executive.
As reported earlier in GlobeSt.com, Sorgente Group of America purchased the Clock Tower for $34.3 million at the end of last month. The 12-story, 53,465-square-foot building is located 221-225 Santa Monica Blvd. in the downtown area here nicknamed Silicon Beach, owing to the number of technology firms with offices.
Kevin Shannon, vice chairman of CBRE, says the Clock Tower sale is “just another benchmark which reconfirms capital recognizing the value of creative office.”
“This building traded for close to $650 per square foot and did not own the parking,” Shannon tells GlobeSt.com. “Two years ago, it would be hard to find many examples that this type of product would trade like class-A office buildings. Creative offices are now getting prices reflective of class-A offices in strong markets.”
Shannon mentions such west side examples as a Playa Vista property getting $670 per square foot, with Amazon's creative campus getting $640 per square foot.
Some tenants and potential tenants may be priced out of the west side, Shannon says, moving to more affordable quarters in El Segundo, Orange County and points south. “There's such a barrier to entry,” Shannon says of the Silicon Beach area. “Rents are spiking. We will see Silicon Beach tenants choosing to migrate down the coast versus inland to vertical space.”
More conversions of buildings to creative space on the west side and nearby cities is likely and “happenng right now,” Shannon says. “The tenants like the product type and investment capital will pay up.”
As reported earlier by GlobeSt.com, CBRE acquired EA Shaw, an independent commercial and residential property partnership specializing in Central London.
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