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HARBOR CONTINUES BUYING SPREE – CLOSES COMMONS AT VALENCIA GATEWAY – VIA ALL-CASH DEAL

Harbor Associates, LLC (“Harbor”) has acquired The Commons at Valencia Gateway via an all-cash deal in a joint venture with Goldman Sachs Asset Management Private Real Estate (“GSAM PRE”). The project is a two building, 156,628 SF office campus on 10.25 acres located at 25124 & 25152 Springfield Court in the city of Valencia, California. The portfolio is currently 81% leased to fifteen tenants. Tom Bohlinger, Ryan Smith and Justin Hager of JLL represented the seller in the transaction.

Harbor plans to renovate the common areas and build out new spec suites to provide a best-in-class workplace for the Santa Clarita Valley while implementing energy saving improvements like EV charging stations. Upgraded gathering areas including an outdoor patio overlooking the adjacent Valencia Country Club golf course will be core elements of the asset repositioning strategy.  The vacant office suites will receive new finishes throughout including LED lighting to bring the suites into a more marketable condition.

The project marks the eleventh acquisition for Harbor in the last three years. The acquisition expands Harbor’s portfolio to 16 buildings encompassing over 1,000,000 square feet.

The Commons at Valencia Gateway is one of the newest office projects in the submarket, and the Class A steel-framed buildings were completed in 2005.  The buildings offer tremendous I-5 freeway visibility and ingress/egress off Valencia Boulevard. The project offers above standard parking with a two-story parking structure and surface parking at a 4:1,000 parking ratio. The property features mountain and golf course views along with efficient and divisible floorplates.

Paul Miszkowicz, Principal for Harbor, states, “We like the office market in Valencia and believe that the recently approved 5,000+ homes at the Newhall Ranch development coupled with the Disney | ABC Studios at The Ranch’s 58-acre soundstage development will provide new demand drivers for the submarket. We continue to seek compelling opportunities in suburban office locations that are out of favor with many institutional investors through our deep network of brokerage relationships and ability to move quickly and close all-cash.”

Joon Choi, Principal for Harbor, adds, “We are excited about the opportunity to update this Class A office campus that already benefits from its unrivaled access to the freeway and superior golf course views.  By adding onsite amenities, building high finish spec suites, and implementing energy savings initiatives, we intend on creating a best-in-class environment for tenants in the Santa Clarita Valley.”

Justin Loiacono, Principal for Harbor, comments, “The Commons at Valencia Gateway marks the 11th value-add office acquisition for Harbor in the last three years. The acquisition expands Harbor’s portfolio to 16 buildings across 11 different projects with square footage more than 1,000,000 square feet. We intend on building on our recent momentum by sourcing new opportunities and pursuing similar strategies in suburban office markets in order to meet our acquisition goal of $250M over the next 12 months. We have a robust pipeline of activity behind this transaction and look forward to continuing to build our Southern California portfolio.”

Joseph Sumberg, Co-head of GSAM PRE, notes, “We believe that, despite the negative stigma surrounding the concept of suburban office, the fundamentals for certain properties in this sub-property type can be quite compelling. We are interested in pursuing other compelling opportunities to purchase best-in-class assets like the Commons at Valencia in fundamentally attractive suburban markets.”

About Harbor: Harbor Associates, LLC (www.harborassociates.com) is a value-add operating platform focused on acquiring and repositioning under-performing commercial real estate assets throughout Denver and Southern California. The three Principals of Harbor collectively have over 30 years of experience in Denver and Southern California and collectively have closed over $1.7B in acquisitions and asset managed over $2.5B in assets totaling over 3M SF of office. The company is a joint venture with The Bascom Group, LLC.

About Goldman Sachs Asset Management Private Real Estate: GSAM PRE focuses on investing across all major property types spanning the risk and return spectrum, sourcing opportunities in primary and secondary markets. The group employs an active management approach, often partnering with operators or property managers to renovate and rebrand assets, including by implementing energy and operating efficiency programs to potentially realize cost savings. The group manages over $1.9 billion of real estate assets as of September 30, 2017 and is part of GSAM, one of the world’s leading investment managers with more than $1.2 trillion in assets under supervision globally as of December 31, 2017.

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