LOS ANGELES—The joint venture between Canyon Catalyst Fund and Pacshore Partners has purchased two value-add creative office buildings in Los Angeles, one in Playa Vista and the other in Malibu. The two properties total 72,017 square feet, and were purchased for $36 million. Both buildings were vacant at the time of purchase.

Located at 12901 Jefferson Blvd., the Playa Vista office property is 39,600 square feet and will be marketed to a single-tenant user. The property is near the joint venture's first purchase together, 5340 Alla Road, and was a strategic move to grow its portfolio in the area. “That market has already proven itself; creative office is there to stay,” Andrew Jennison of Industry Partners, who represented the buyer and seller in both transactions, along with Industry Partners' Travis Landrum and Jim Jacobsen, tells GlobeSt.com. “This particular opportunity is great because there is not available to users who want to have their own building.”

The joint venture plans to renovate the building so that it can compete in the creative office market. “They plan to grow the building by adding mezzanine space,” explains Jennison. “By adding square footage and because it is a stand alone building, it will be attractive in the marketplace because there is not really any of those available at the moment for lease at that size.” The property was previously occupied by Sony and Hydraulix, a visual film effects company. Industry Partners will handle the releasing of the property once renovations are complete.

The second property purchased is the Enclave, a three-building 32,417-square-foot office property located at 22619 Pacific Coast Hwy. in Malibu. The property was built in 1995, and has been occupied by the seller, JAKKS Pacific, since completion. This is the first time this specific property has been available for sale, and it is rare for any property like this to come to market in Malibu. “This is irreplaceable real estate in a great area and with great architecture and unobstructed ocean views. That market really caters to smaller- to mid-sized entrepreneurs; it isn't a very big market,” says Jennison, adding that Malibu only has about 300,000 square feet of office space. “This was really a lease-up opportunity for the buyers. There are three separate buildings, so this really isn't an ideal property for a single tenant, and I think they feel that they can really push rents by catering to that small-to-mid sized entrepreneur who is looking for the best in class office environment in Malibu.”

The joint venture also plans to renovate this building to make it more attractive to a creative user and to attract top-tier tenants. Likewise, Industry Partners has also been retained to handle the leasing of this building. “In Malibu, there really isn't a building that caters to creative office. Most of the buildings in Malibu have your typical office feel, so this opportunity allows the buyers to present something to the marketplace that is better and different, and one companies are looking for today,” says Jennison. “We have already signed one tenant, and we have multiple proposals on other parts of the building—and we haven't started our marketing efforts yet. In a market with a 3% vacancy rate, they can take what is doing well in markets like Santa Monica and Playa Vista and apply the same idea to Malibu to lease up the building.”