Empty office building to get overhaul

At least one real estate brokerage has some faith in the Inland Empire office market.

Irvine-based Stillwater Investment Group has bought a two-story, 34,500-square-foot office building in Ontario, said John Drachman, the company’s founder and president.

The building, at 1801 E. Holt Blvd., was built in 2007 and has never been occupied, having fallen victim to the recession and subsequent collapse of the Inland Empire office market.

Stillwater paid $2.35 million for the structure, which is about one block from the Ontario Convention Center and near Interstates 10 and 15. The company plans to refurbish and lease the property, probably to multiple tenants, for $1.85 a square foot.

While the local office market continues to struggle, there’s been enough space leased on the west end during the past few months to believe the building is a good long-term investment, Drachman said.

“At this point it’s a shell,” Drachman said. “It needs a lot of work, but it’s a good building with a lot of potential. Once we get it fixed up, we should have immediate success leasing it.”

Repairs will include new bathrooms, a refurbished elevator, new common areas and a new lobby. Stillwater plans to spend between $500,000 and $600,000 on the improvements, which will take two to three months to finish, Drachman said.

Once it’s on the market, the building – which will be able to accommodate about 130 workers after the improvements are completed – will fill a need, Drachman said.

“Tenants who are looking for 20,000 square feet of space in that part of the market don’t have a lot of options,” Drachman said. “Those spaces have been leased up, and there isn’t going to be a lot of new construction.”

Stillwater bought the building from Miami-based Rialto Capital Management LLC, which maintains a regional office in Aliso Viejo. CBRE Group Inc. Ontario represented both parties in the negotiations.

The transaction was announced earlier this month.

Correction: Stillwater Investment Group in Irvine was misidentified in one reference as a brokerage house in the Feb. 6th edition of iebusinessdaily.com.