Holland Partners has acquired Congressional Place, a 73,769-square-foot office building in Long Beach, from ValueRock Realty for $41 million. Holland plans to redevelop the property into apartments. ValueRock plans to roll the proceeds from the sale into a 1031 exchange deal.

Located at 6700 East Pacific Coast Highway, Congressional Place is a two-story building on 2.5 acres with views of the marina and ocean. It is near several major freeways and has a high walkability rating. All of these details made it an ideal location for a multifamily project. Newmark managing director Anthony Muhlstein, one of the brokers that worked on the deal, said, "Given the disparity between office and multifamily market fundamentals and favorable zoning, office is no longer the highest and best use of this property." Muhlstein represented the seller in the deal along with Newmark senior managing director Chris Benton, co- head of capital markets Kevin Shannon, vice chairman Bill Bauman and executive managing directors Ken White and Sean Fulp.

Apartment conversion projects have become wildly popular in the aftermath of the pandemic, which reallocated demand. Office properties were among the asset classes to suffer, while apartment demand is soaring. Of the apartments buildings currently slated for construction, 42% are office conversions, according to a RentCafe analysis of Yardi Matrix data. In fact, former office buildings make up a quarter of the units that will become available this year.