Newmark 1 announces it has completed the $41 million sale of Congressional Place, a two-story, 73,769-square-foot office building planned for multifamily redevelopment and located in Long Beach, California.
Newmark Senior Managing Director Chris Benton, Managing Director Anthony Muhlstein, Co- Head of Capital Markets Kevin Shannon, Vice Chairman Bill Bauman and Executive Managing Directors Ken White and Sean Fulp represented the seller, ValueRock Realty, an Irvine-based real estate investment firm. The buyer was Holland Partners.
“With its prime coastal location, outstanding area demographics and strong multifamily market fundamentals in the region, Congressional Place received intense investor interest,” said Benton.
“We greatly support the City of Long Beach’s vision of redevelopment and are excited to selected Holland and Invesco to develop this property,” said Dennis Vaccaro, Senior Vice President of ValueRock Investment Partners. “We saw this as an excellent opportunity to sell the property as a potential future residential development and it being the highest and best use for the community. We plan to 1031 the proceeds into other Southern California locations.”
Located at 6700 East Pacific Coast Highway, the 2.53-acre parcel sits on the border of Long Beach and Seal Beach and presents unobstructed views of the marina and ocean. The property is convenient to major freeways and public transportation and offers a high walkability rating. It is immediately adjacent to 2nd & PCH, a new high-end destination retail center delivered by CenterCal in the fall of 2019, offering national, regional and locally grown retailers and restaurateurs such as Whole Foods Market, Urban Outfitters, Lululemon, The Bungalow Kitchen by Michael Mina, Tocaya Organica, Caffe Luxxe, Peloton and more.
Muhlstein added, “Given the disparity between office and multifamily market fundamentals and favorable zoning, office is no longer the highest and best use of this property.”
Given relatively stronger market fundamentals, investors have increased allocations to multifamily properties while decreasing allocations to office assets over the past several years, according to Real Capital Analytics data analyzed by Newmark Research. Between 2006 and 2010, investors allocated 22% of commercial real estate investment dollars to multifamily assets and 29% to office assets. As of 2021, office allocations had declined to 13% while multifamily allocations had risen to 39%, the highest of all major property types.