Santa Monica Office Building Trades for $40 Million
'Opportunities to acquire prime assets located in Downtown Santa Monica are few and far between,' said Shannon. 'The seller had owned this asset for almost 30 years, which is not an uncommon hold period for jewel box Santa Monica assets like 501 Santa Monica.'
The creative, seven-story building was 65% leased at the time of the sale and features exposed concrete ceilings and ductwork, concrete floors, LEED Gold certification and 13-foot clear ceiling heights. It is located two blocks from the Metro E Line Station and has access to the I-10 freeway through 4th Street and to walkable amenities, including Third Street Promenade.
Information for this article was sourced from Newmark.
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Boston Globe
7 days ago
- Boston Globe
After Boston's lab building boom, one-third of it sits empty. What do we do now?
Laboratory space inside 74M. Suzanne Kreiter/Globe Staff Advertisement After a COVID-era building boom, The glut of space is particularly striking Advertisement Yet now, converting those empty labs is both financially and physically difficult. And that leaves the real estate industry grappling with a vexing question: What the heck do we do with all this empty space? It's not as easy to swap out lab space for new tenants such as a traditional office or light manufacturing, or converting an Lab buildings are far more technically complicated than most others, with elaborate mechanical and air-treatment systems that take up much more room and are costlier to build. Rishi Nandi, a leader in design firm Sasaki's science and technology practice, said lab space can cost around $1,200 per square foot — at least 50 percent more than office space. That means a lab building commands higher rents to make sense to investors. When developers borrow money to fund construction, they model what the building is expected generate in rent, to show lenders the kind of return they can expect. Lab users typically pay higher rents than a standard office user; asking rent for a new lab in Greater Boston is about $85 per square foot, versus around $50 on average for office space, Newmark research shows. Investors who financed a lab building will want to see that higher number. A view of 109 Brookline Ave. in Boston's Fenway-Kenmore neighborhood. David L Ryan/ Globe Staff Most owners or operators considering different uses for their lab space have buildings in 'core and shell' status — meaning they are all but done but for the final fit out of the tenants's specific gear and fixtures. Still, even some 'core and shell' buildings have multiple millions of dollars' worth of HVAC systems, cooling towers, and other specialized equipment. Advertisement Then there are the physical challenges of converting lab space into office or housing. Typically, around 40 percent of a lab building is designed for office use. But the whole building needs robust mechanical systems, redundant power — so as not lose research in the case of a power outage — and much more intense ventilation. In all, lab buildings typically have three times as much mechanical equipment as office buildings, said Larry Dubord, senior chief engineer with JLL. In the mechanical floor on the 17th floor of 74M, a 10-foot-by-20-foot air duct sprawls across much of the double-height floor, pushing air into workspaces below. HVAC systems in lab buildings don't recirculate air within the building as offices and apartment buildings do, but instead constantly bring in outside air that has to be heated, cooled, or dehumidified before it can go into workspaces. The ductwork for all that often requires higher ceilings, which eats into rentable space. A 300-foot apartment tower could feature at least 25 stories with hundreds of units; by contrast, the 294-foot 74M has just 15 rentable floors for tenants. The difference in ceiling heights, Nandi of Sasaki said, translates to potentially dozens fewer apartments paying rent each month. Massive air ducts, such as those in 74M, are needed for lab space. Suzanne Kreiter/Globe Staff 'When you look at it from a financial modeling perspective, it's just a lot less space,' he said. Advertisement And there are small but crucial differences in how different kinds of buildings are designed, said Troy Depeiza, a principal and co-founder of architecture firm DREAM Collaborative in Boston and an expert in designing life science labs. Warehouses, for instance, need floors that can hold a lot more weight, to safely load goods and drive forklifts. Residential building codes require lots of windows. Even elevators, staircases, and bathrooms are often placed differently in lab buildings than in residential or industrial. 'There's going to be a whole lot of rejiggering to make that work,' he said. It just 'wouldn't be efficient." So, for the most part, their owners have few options other than waiting for the market to recover. Some, though, are 'looking hard at marketing those spaces to other users,' be it office or medical office tenants closer to Boston or so-called 'tough tech' and advanced manufacturing out in the suburbs, said Liz Berthelette, the head of Northeast research with Newmark in Boston. Empty lab space overlooks housing in Somerville at 74M. Suzanne Kreiter/Globe Staff One developer leasing lab buildings to life-science companies — but not to use as laboratories — is Boston Properties, now known as BXP. The office giant broke ground in 2021 on a $290.5 million lab building next to the ThermoFisher Scientific's headquarters in Waltham's CityPoint; earlier this year it signed a lease with a unnamed life-science company that only wanted the office space. The firm is now negotiating two similar deals in the building, BXP president Doug Linde told Wall Street analysts last month. 'The economics of doing an office transaction on raw space, even though the building had been purpose-built for lab and has the infrastructure, are far superior to lab transactions today, given the elevated tenant improvements necessary to compete in the lab market,' he said. Advertisement For developers of lab projects that haven't yet started construction, switching uses may also be a tough financial loss to swallow. Many paid a premium for the land on the expectation of charging higher lab rents, and pivoting to another use such as housing means potentially years in permitting, with all the architect, attorney, and engineering bills that would entail. But some are deciding to make such a change: In June, Bulfinch president Robert A. Schlager That shift can also come at a cost to municipalities. Many cities and towns across Greater Boston leaned hard on the lab boom to diversify their tax bases and bring in more commercial tax revenue, which would help offset the burden on homeowners. Somerville, for example, has seen nearly 2 million square feet of new lab space since 2020, a crucial part of its especially after Some of the labs are bustling and full; others, like 74M, stand empty. 74M at Middlesex Avenue outside Assembly Square in Somerville is vacant. David L Ryan/ Globe Staff Tom Galligani, executive director of Somerville's office of strategic planning and community development, said the city is fortunate in that its lab space is new construction and not conversions of older offices, as was the case in many nearby suburbs. The new buildings incorporate rigorous energy efficiency standards that are attractive to future tenants, and Galligani is confident they will at some point be occupied. Advertisement 'All of our stuff is brand new," he said. 'I'd like to think we're not going to have the same challenges in the life-science space. But of course, time will tell.' Matt DeNoble, a senior director for Greystar, the developer behind the 74M building, said the firm is better off waiting for the right tenants than to try to force a use that doesn't make sense. With immediate 'We're starting to see groups say: 'It's time for us to make decisions,'' DeNoble said. 'We are not worried long term about filling this building up.' The main lobby of the new lab building at 74 Middlesex Avenue. Suzanne Kreiter/Globe Staff Catherine Carlock can be reached at
Los Angeles Times
08-08-2025
- Los Angeles Times
Santa Monica Office Building Trades for $40 Million
Newmark announced the $40-million sale of 501 Santa Monica Blvd., a seven-story, 78,500-square-foot office building and a four-level stand-alone parking structure in Downtown Santa Monica. The seller, Kilroy Realty Corp., was represented by Newmark's co-head of capital markets Kevin Shannon, vice chairmen Rob Hannan, Ken White, Laura Stumm, Michael Moll and director Alex Beaton. The property was acquired by Washington Capital, which was self-represented. 'Opportunities to acquire prime assets located in Downtown Santa Monica are few and far between,' said Shannon. 'The seller had owned this asset for almost 30 years, which is not an uncommon hold period for jewel box Santa Monica assets like 501 Santa Monica.' The creative, seven-story building was 65% leased at the time of the sale and features exposed concrete ceilings and ductwork, concrete floors, LEED Gold certification and 13-foot clear ceiling heights. It is located two blocks from the Metro E Line Station and has access to the I-10 freeway through 4th Street and to walkable amenities, including Third Street Promenade. Information for this article was sourced from Newmark.
Bloomberg
06-08-2025
- Bloomberg
Data Center Investing Heats Up
Bloomberg Markets TV Shows As data center investing continues to heat up, so does commercial real estate tied to those data centers. Newmark President of Capital Markets Chad Lavender explains how much land is going to data centers vs. other types of commercial property with Sonali Basak on "Bloomberg Markets." (Source: Bloomberg)
