A pair of office buildings near the Long Beach Airport have sold for $29 million, a 40% increase from the last time they sold in 2019, according to CoStar Group.

Located at 5000 and 5001 Airport Plaza Drive, the buildings include 126,219 square feet of leasable space on 2.7 acres, according to Newmark, the real estate firm that helped broker the deal. The property has a 46-year ground lease in place with the city of Long Beach.

“The suburban Long Beach office market has performed well since the onset of the pandemic with tenant activity increasing in part due to office to industrial conversions in office markets near the Ports,” Kevin Shannon, co-head of U.S. capital markets for Newmark, said in a statement. “Vacancy for this asset averages only 6% since 2014, which is less than half that of the submarket through that timeframe.”

Shannon, along with Executive Managing Director Ken White and Senior Managing Director Scott Schumacher, represented the seller, WCCP Airport Plaza L.B. LLC. Sean Fulp and Ryan Plummer also assisted with the sale.

The buyer was LB5000, LCC.

The buildings recently underwent $1.5 million in capital improvements and are 100% leased to 19 tenants, including the Federal Aviation Administration, Advanced Medical Management and NACA Logistics.

The sale comes as rising interest rates have cooled real estate markets across the country, including Long Beach. For office space, the uncertainty surrounding the future needs of companies post-pandemic also has brought down demand, local experts have said.

Vacancy in the suburban Long Beach office market is high, and only marginally better than the Downtown market, according to Cushman & Wakefield data. At the end of the second quarter, the suburban office vacancy was 22.9%, up slightly from 21.9% the quarter before, according to a Cushman report.

Rising interest rates cool local commercial real estate market