PASADENA, CA—The Laurus Corp. has purchased a 163,194-square-foot class-A office building in Pasadena from a joint venture between Heitman and the Ruth Group. The investor plans to renovate the property's common areas and building systems. The purchase price for the property was not disclosed, however, industry sources unrelated to the deal say that it was $52.5 million or $322 per square foot.

The investor was largely attracted to the building's Pasadena address and close proximity to retail. Located at 199 South Los Robles in Pasadena, CA, the property is in a prime location with an average occupancy of 89% over the past 15 years, and has maintained one of the lowest vacancy rates in the greater Los Angeles market. The property itself is located just a short walk from the retail and dining amenities in Old Towne Pasadena and from the Paseo Colorado lifestyle center and the Lake Avenue Business and Shopping District. It is also near the Metro Gold Line stop and adjacent to the Pasadena Convention Center.

"Our business plan involves considerable improvements to the asset, including a well-designed renovation program for the lobby, corridors, bathrooms, elevator lobby, overall common areas and building systems," says Andres Szita, chairman of Laurus Corp. "These upgrades to the interior and exterior will further drive rental rates, occupancy and tenant satisfaction." The property's current rental rates are 25% to 30% below market, allowing the investor a great opportunity to drive rental rates and revenue for the asset. There is no information at this time about the amount of capital the Laurus plans to invest into the upgrades, and they did not respond to a request for comment about the renovation project.

It isn't only the historically low vacancy rates in the office sector that are attracting investors to the Pasadena market. Multifamily investors are also heading to the market to scoop up properties at historically low cap rates. Recently, two rare properties on Pasadena's famous Millionaires Row traded hands, underlining demand for multifamily product. In both cases, the owners of the properties decided to sell the rare assets to take advantage of the outstanding market conditions and low cap rates—and investors lined up, with multiple offers on both properties.