The South Bay's Best Kept Secret Submarket
Do you know San Pedro? You should, since it's peeling off tenants from other South Bay areas. Recently, we drove across the Vincent Thomas Bridge to chat with one team that's remaking the area.
Our guides: Jupiter Holdings managing member Ed St. Geme, whose firm is rebranding the Topaz office tower in downtown San Pedro, and CBRE SVP Dave Smith, who heads up the leasing team. Ed bought the 11-story office building, formerly known as Pacific Place, in December 2012 from its developer, Tutor Perini chairman Ron Tutor. For 20 years, defense industry computer contractor Logicon, now part of Northrop Grumman, was the main tenant. Northrop vacated in 2010, leaving the 293k SF building with substantial vacancy.
Ed purchased the building due to its hard-to-replicate waterfront location—you can see the Ports of LA and Long Beach from most windows—and leasing upside, combined with an artistic and historic community. He and Dave cite San Pedro's strong local character, including a weekly farmer's market and a monthly art walk. Chain stores haven't caught on, either; if you want a coffee, you don't go to Starbucks but to Sacred Grounds, the local coffee spot across the street.
With Logicon/Northrop locked down for years, the building has been off brokers' radars, posing a challenge on the leasing side. But it's gaining traction. One appeal is the building (originally designed by The Nadel Partnership) was built with extra power. A building of Topaz’s size typically has 2,000 amps. Logicon increased this to 6,000 amps. (Perfect if your employees take forever blow drying their hair.)
The third floor has been built out with spec suites, offering styles from creative space (open ceilings, polished concrete floors) to more traditional. Kardent designed the common areas, and SAA is responsible for the interior TI.
Topaz provides bikes for tenants to tool around the area. New leasing activity at Topaz includes Regus, which signed for 15k SF on the fourth floor. Dave says the executive suite operator is a good fit with San Pedro's startups and entrepreneurial folks. PROCEL leased 5,000 SF; the medical staffing firm, which was located in Hermosa Beach for 24 of its 25-year history, typifies a segment of migrating tenants. Another new tenant, Blue Logistics, relocated from downtown Long Beach.
There's a lot of activity that has nothing to do with the office market. From Topaz's window, we snapped this of San Pedro's venerable Ports O' Call, a New England fishing village-themed retail center. The Ratkovich Co in conjunction with Jerico Development won an RFP with the Port of LA to redevelop the 30-acre site. Not far away, Ponte Vista, a subdivision boasting 676 homes, recently broke ground.
On Thursday, Topaz will unveil an original, commissioned 20-by-10 foot artwork by local artist John Van Hamersveld of Endless Summer movie poster fame (and numerous rock album covers).
The building is now 30% leased. Three other deals are in active negotiations for one and a half to two full floors each, and all would be moving from other areas in the South Bay. Ed, who founded the private equity investment firm in 1997, has six kids aged 16 to 26, and played football at Stanford. Dave is a sideline cheerleader for his two kids, 12 and 14, but likely wouldn't have cheered for the Cardinal—he comes from a long line of UCLA Bruin die-hards. But if synchronized leg-crossing were a sport, they'd be champs.