A 58,104 square foot office building in Palmdale has recently been placed on the market for the first time in about seven years. According to the listing by CBRE, the property, located at 39115 Center Drive, is on the market with guidance set at $24.5 million, or about $421 per square foot.
Built in 2008, the two-story building sits on more than 4.2 acres of land. Currently, the property is owned by RBL Real Estate, which initially acquired the property in 2015, according to public documents.
The property is nearly 95 percent occupied with a number of long term tenants, including the Los Angeles County Department of Children and Family Services (DCFS), University of Massachusetts Global and the California Department of Transportation. Overall, tenants have a weighted average lease term of eight years, and many tenants have resigned leases as well. For instance, the Los Angeles County Department of Children and Family Services recently signed a new nine-year lease to occupy nearly 72 percent of the building.
The property has also been maintained and upgraded throughout the years, with the County of LA investing up to $100 per square foot of additional capital into tenant improvements. In 2021 and 2022 alone, $5.9 million of capital has been invested into the property.
The building also serves as the only County of Los Angeles DCFS location In the Palmdale area, which services approximately 204,000 people. In addition, the location puts the office building within close proximity to the Palmdale Regional Medical Center and nearby retail amenities at the adjacent Palmdale Marketplace.
Overall, CBRE research shows that suburban office markets are currently performing better than traditional urban core markets due to recent work trends that have come out of the COVID-19 pandemic. According to CBRE, there is also a lack of office product in the Antelope Valley, with the vacancy rate currently at 5.3 percent. In addition, rental rates for office properties in the Los Angeles area submarket has grown by 2.1 percent in the past year to about $29.81 per square foot on average.