Related Companies and Cruzan have refinanced a major South Bay office tower through a $64.7 million loan from Waterfall Asset Management and Delaware Life. The property, called the Torrance, spans 301,000 square feet across eight stories at 21250 Hawthorne Boulevard in Torrance, California.
The Class A office building represents a significant asset for the ownership group during a period of structural headwinds in the office market. Refinancing at this scale indicates lenders retain confidence in well-positioned properties within premium submarkets, even as trophy assets command investor attention while secondary office stock faces persistent challenges.
Waterfall Asset Management and Delaware Life jointly structured the financing, a pairing that reflects how alternative lenders and insurance capital continue to fill gaps created by traditional bank pullback from office lending. Insurance companies like Delaware Life hold long-term balance sheets suited to stabilized office properties in established markets. Waterfall's involvement signals appetite for quality assets with strong sponsors behind them.
Related Companies brings institutional heft to the ownership team. The New York-based developer and investor has deep experience navigating market cycles across residential, hotel, and commercial segments. Cruzan, as co-owner, provides additional local market expertise and operational capability. Together, they've positioned the Torrance to weather near-term headwinds while remaining positioned for longer-term value creation.
Torrance itself sits in one of Los Angeles County's most resilient office markets. The South Bay submarket, anchored by aerospace, technology, and advanced manufacturing tenants, maintains diversified demand drivers. Hawthorne Boulevard serves as a major thoroughfare connecting to transportation corridors and employment centers. The property's Class A designation means newer construction or extensive recent renovation, commanding rental premiums over Class B and C stock in the same market.
Office refinancing activity tells two stories. Primary lenders and capital sources have largely retreated from the sector, citing remote work adoption and rising cap rates. However, properties with strong sponsors, institutional ownership, and strategic locations continue to attract refinancing capital. The $64.7 million loan amount suggests the property carries stabilized cash flow sufficient to support debt service under current and reasonably stressed interest rate environments.
For Related and Cruzan, the refinancing provides balance sheet flexibility. Proceeds can be deployed toward other development projects, fund capital improvements at the Torrance, or return capital to investors. The transaction also validates the property's market position and performance metrics in a sector where lender scrutiny has intensified considerably since 2022.
Tenants at the Torrance benefit from ownership continuity and access to capital for maintenance, upgrades, and amenities. Landlords securing favorable refinancing terms can absorb market softness more effectively than peers facing refinancing risk or struggling to attract lender interest.
The South Bay office market, while softer than pre-pandemic peaks, maintains stronger fundamentals than many California submarkets. Companies in aerospace, defense, and technology have kept regional operations intact. Availability rates run elevated, but the Torrance's Class A credentials and strategic location position it better than aging secondary space.
This refinancing validates that capital remains available for high-quality assets with experienced sponsors, even in challenging office cycles.