PASADENA, CA—Ethika Investments has allocated capital through its Diversified Opportunity Real Estate Fund for the purchase of an institutional-quality office property located at 199 South Los Robles Blvd. in Pasadena, CA. In an earlier story, GlobeSt.com reported that its affiliate the Laurus Corp. purchased the property from a joint venture between Heitman and the Ruth Group for $53 million.

“Ethika looks for office opportunities in high-barrier to entry markets that exhibit strong job growth in sectors such as technology, health care, financial services and energy,” Austin Khan, chief investment officer at Ethika Investments, tells GlobeSt.com. “Los Angeles, and more specifically, Pasadena, not only meets those criteria but is a market where there is a high level of institutional demand for well-located class-A office product. After completion of a comprehensive renovation, this building will be one of the most attractive destinations for tenants seeking space in the Pasadena area.”  

Ethika plans to invest $5 million in the property to update the building's common areas, including elevators, lobbies and corridors, as well as the tenant units and the retail space in the building. Some capital will also be allocated to improve the energy efficiency in the building. “Pasadena is still trending back towards its 2007 peak, when office vacancy fell below 3% and class-A rents rose into the low $40's,” adds Khan. “199 Los Robles has an excellent tenant base that we believe will be eager to grow into the building as we enhance it with more amenities and a modern look and feel, and once fully leased, it will be a highly desirable asset for longer-duration institutional capital.”

This is Ethika Investment's 13^th investment through the fund and its second Los Angeles investment. Although the fund is based in Los Angeles, it seeks to acquire opportunistic properties throughout the nation. However, the continued growth in the Los Angeles market may mean more opportunities here. “Los Angeles is seeing strong, positive trends in employment growth across a broad array of industry sectors,” says Khan. “We believe this growth will continue to create significant upward momentum in occupancy and rate growth for both hotel and office assets and is why we moved to acquire both 199 Los Robles and the 474-room Marriott Warner Center over the past seven months.” The fund offers 16%-18% net returns to its investors.