New York-based startup Safehold has closed a $60.6 million deal to acquire the ground lease underneath a Long Beach government building that houses the offices of the federal Internal Revenue Service and Immigration and Customs Enforcement agencies.
Safehold’s acquisition is for 501 West Ocean Boulevard, also known as the Glenn M. Anderson Federal Building, according to a deed filed in Los Angeles County. The site, located on the corner of Ocean Boulevard and Magnolia Avenue, contains two structures, both of which were built in the late 1980s. The larger office building spans 620,523 square feet, city records show. The smaller structure has 297,821 square feet.
The lease seller is Chicago firm Walton Street Capital. In addition to the sale, the buyer and seller signed an agreement under which Walton Street will continue to retain control of the site as a tenant. Walton Street’s lease for the property runs 99 years until May 2121.
Safehold recently raised $24 million from an investment group that includes NBA player Kevin Durant and the family office of Fanatics founder Michael Rubin. The Long Beach deal marked the first outside investment for Safehold subsidiary Caret Ventures. The funding, which also included investments from Ribbit Capital and Fifth Wall, implied a $1.75 billion valuation for Caret, according to Safehold.
Safehold, which has investment firm iStar as its largest shareholder, has a ground lease portfolio valued at $5.5 billion, according to its website. Most of its holdings are in the Northeast and Western parts of the U.S. Half of its portfolio is made up of office properties. Multifamily accounts for 34 percent while hotels are 15 percent.
Other recent ground lease transactions by the company include a $77 million acquisition for the NoMad Hotel site in New York and a $64.5 million deal for the District Attorney’s office in San Francisco. The firm did not respond to a request for comment.
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