California’s public workers’ compensation carrier plans to anchor the nine-story Class A building as a Southern California hub while leasing the balance to third parties — the latest Pasadena office trade to print at a fraction of pre-pandemic value.
State Compensation Insurance Fund has purchased the 158,785-square-foot Class A office building at 35 N. Lake Ave. in Pasadena, converting a value-add play that went sideways for its previous owner into an owner-user acquisition at roughly $207 per square foot. The sale price was approximately $33 million, according to public documents reviewed by The Registry.
The number tells the story of Pasadena’s distressed office cycle. Swift Real Estate Partners paid $58.25 million for the same nine-story tower on Oct. 24, 2019, as part of the three-building, 516,890-square-foot Pasadena Collection the San Francisco–based firm assembled from a global investment manager for $193 million. The current trade represents a roughly 43 percent decline from Swift’s 2019 basis in the asset — and it arrives one year after Swift sold a second piece of that same collection, the 146,000-square-foot 790 E. Colorado Blvd. building, for $31.5 million, compared with the $59 million it paid PGIM Real Estate.
Swift financed its 2019 acquisition with an $85.42 million loan from a TIAA Financial entity secured on the same date, part of $160 million in three-year floating-rate debt arranged through Nuveen Real Estate across the portfolio. TIAA itself remains a tenant at 35 N. Lake Ave.
For State Fund, which has insured California businesses since 1914 and is funded solely by premiums and investment income, the purchase converts a recurring lease expense into an owned asset at a cycle-low basis. The insurer plans to occupy a portion of the building as a regional hub for its Southern California operations and lease the balance to third-party tenants. A renovation is planned, with new amenities including a fitness center and meeting space open to tenants. Swift will continue to manage the property under the new ownership.
“Acquiring this building marks an important milestone for us, highlighting our efforts to optimize our real-estate footprint and underscoring our lasting investment in the area, our valued customers, and, above all, our Southern California employees,” Andreas Acker, chief administrative officer at State Fund, said in a statement.
Brad Chelf, Ron Wade and Taylor Watson of CBRE represented the buyer. JLL represented Swift.
“This transaction provided our client with a well-located office asset that supports both near-term operational needs and long-term flexibility,” said Brad Chelf, senior vice president at CBRE, in a statement. “The property’s location and existing infrastructure position it well for owner-occupancy and continued leasing activity.”
Also known as the Pasadena Financial Center, 35 N. Lake Ave. sits in Pasadena’s central business district at the convergence of the Lake Avenue and Colorado Boulevard retail corridors, with Metro A Line access nearby. In-place tenants have historically included Comerica, Zurich American Insurance, TIAA Bank, Paycom and several law firms. The three-building Pasadena Collection carried a combined 68 percent occupancy when Swift acquired it in 2019.
The pricing reflects the broader stress on Pasadena’s office submarket, which remains one of the softest within Los Angeles County’s Tri-Cities market. Pasadena’s overall office vacancy rate stood at 23.4 percent at the end of 2025 against total availability of 27.3 percent, while Class A direct asking rents averaged $4.13 per square foot full-service gross, according to CBRE’s Q4 2025 Tri-Cities Office Figures report. Submarket-wide, Tri-Cities Class A vacancy registered 30.3 percent, with 326,000 square feet still under construction in neighboring Burbank. CBRE recorded 28,982 square feet of positive net absorption in Pasadena for full-year 2025, a slim bright spot.
The transaction also tracks a wider revaluation underway at Pasadena’s trophy office assets. A confidential buyer acquired the 164,101-square-foot 2964 Bradley St. building for $78.8 million, or $480 per square foot, in Q4 2025, according to CBRE’s Q4 2025 Tri-Cities Office report — a sharp premium relative to 35 N. Lake Ave. that illustrates how bifurcated the market has become between stabilized and value-add product. And earlier this week, lender Heitman began marketing the four-building, 650,000-square-foot office campus at 251 South Lake Avenue after a failed public auction, The Real Deal reported. Coretrust Capital Partners lost control of that complex in 2023 after failing to refinance roughly $270 million in debt; an initial $114 million asking price in late 2023 represented nearly half what Coretrust paid in 2018.
Nationally, the office sector is beginning to find a floor. U.S. office vacancy has been essentially flat over the past year, and Class A vacancy is down 30 basis points year-over-year, with four-quarter rolling net absorption of 5.2 million square feet — the highest post-pandemic reading — according to Cushman & Wakefield’s Q1 2026 U.S. Office MarketBeat. CBRE’s 2026 U.S. Office Outlook projects Los Angeles will return to positive rent growth in 2026 as inventory removals outpace new deliveries for the first time since CBRE began tracking the market in 1988.
For buyers with cash and long holding periods, that backdrop is beginning to look like opportunity. State Fund, a public enterprise not-for-profit that does not answer to quarterly performance benchmarks, is precisely the profile of capital the current cycle rewards. Swift’s exit crystallizes the markdown; State Fund’s renovation plan and anchor occupancy will determine whether $207 per square foot proves to be the bottom on Lake Avenue — or merely a waypoint.
