Real Estate

Rose Equities Buys Torrance Offices for $30.6M, Plans 272-Unit Complex

Rose Equities buys Torrance office for $30.6M to build 272-unit apartment complex with 28 affordable units.

By Doug Elli

7/11, 12:33 EDT

Key Takeaway

  • Rose Equities acquired a Torrance office building for $30.6M, planning to replace it with a 272-unit apartment complex.
  • The purchase price was $503 per square foot, significantly higher than the $260 per square foot paid by Optimus in 2019.
  • The new development, Torrance Del Amo, will include affordable housing and is expected to take 30 months to complete.

Rose Equities' Strategic Acquisition in Torrance

Rose Equities, a Beverly Hills-based developer led by Leonard Glickman, has made a significant move by purchasing a 60,800-square-foot office building in Torrance for $30.6 million. This acquisition, located at 2325 Crenshaw Boulevard, is set to be transformed into a 272-unit apartment complex, marking a notable shift in the use of the property. The seller, Optimus Properties, originally acquired the site in 2019 for $15.8 million, highlighting a substantial appreciation in value. This off-market deal, brokered by Anthony Muhlstein and his team at Newmark, underscores the ongoing trend of redeveloping outdated office properties to meet the rising demand for multifamily housing.

Details of the Torrance Del Amo Project

The Torrance Del Amo project, as it is named, will feature four buildings of four to five stories, offering studio, one-, two-, and three-bedroom apartments. The development will include a two-level garage with 467 parking spaces and will employ density bonus incentives to provide 28 affordable units for very low-income households. Designed by Santa Monica-based Moore Ruble Yudell Architects & Planners, the project will also feature courtyards and a swimming pool. Construction is expected to take 30 months, although a specific completion date has not been disclosed. This project reflects Rose Equities' long-term investment strategy, with plans to hold the property for 60 to 70 years.

Broader Trends in Office-to-Residential Conversions

The acquisition and planned redevelopment by Rose Equities are part of a broader trend of converting underutilized office spaces into residential units. This trend is driven by the shifting demand in the office sector, exacerbated by the pandemic and the rise of remote work. Similar projects are underway in other parts of California and across the country. For instance, Core Development Group plans to demolish a 12-story office building in Santa Ana to build a 162-unit apartment complex. These conversions are not only a response to the declining demand for office space but also a strategic move to address the housing shortage in urban areas.

Market Dynamics and Implications

The shift from office to residential properties has significant implications for the real estate market. Office property values have been declining, with some properties selling at substantial discounts. For example, Namdar Realty Group recently acquired the debt on a 47-story office building in Chicago's Central Loop at a 73 percent discount. This trend indicates a broader market adjustment as developers and investors pivot to meet the changing demands of urban living. The redevelopment of office properties into residential units is likely to continue, driven by both economic factors and urban planning policies aimed at increasing housing supply.

Street Views

  • Anthony Muhlstein, Newmark (Neutral on the office-to-apartment redevelopment trend):

    "The sale reflects an on-going trend of redeveloping antiquated office properties in target multifamily markets as demand shifts in the office sector."

Management Quotes

  • Leonard Glickman, Principal of Rose Equities:

    "We intend to keep the property for 60 to 70 years."