Pasadena’s Wescom Sells Marengo Avenue Headquarters Building in $59 Million Lease-Back Deal

Wescom Credit Union has sold its Pasadena headquarters, at 123 S. Marengo Ave., for $59 million in a lease-back deal with Los Angeles Credit Union Service Organization (CUSO), which is co-owned by 20 credit unions, a report in Credit Union Times said on Wednesday.

The buyer is CUSO Realty Investors One (CRIO). The report said the CUSO used $29 million in equity and a $30 million loan for the purchase, which closed Feb. 18. CU Capital Management, LLC (CUCM), known as CUSO, managed the fundraising, bidding and purchasing process on behalf of CRIO.

A lease-back, short for “sale-and-leaseback,” is a financial transaction in which one sells an asset and leases it back for the long term. In the case of Wescom’s headquarters building, Wescom will continue to use it although it no longer owns the asset.

Wescom will lease back the entire building for an initial term of 15 years with options to renew, another report in CU Today said.

“The lease is triple net with Wescom maintaining full operational control and maintenance of the property, and picking up all building related costs, including structural repairs,” a joint statement by CRIO and CUCM said.

The bidding process involved 20 bidders, CU Today said in a report on March 17 about the purchase. CRIO was the CUSO bidder, according to the report.

Guy Messick, CEO of NACUSO Business Services in Grand Rapids, Michigan, with which CUCM has teamed up to promote future lease-back deals, announced the Wescom sale during a “Studio Lounge” session at CUNA’s GAC Feb. 27-March 3.

As a result of the transaction, Wescom added approximately $50 million in capital and increased its capital ratio from 7.79 percent to more than 8.5 percent. Due to an accounting rule change effective in 2022, Wescom can recognize all the capital gain upon the sale, the CUSOs stated.

Wescom Credit Union, founded in 1934 as the Telephone Employees Credit Union, has owned and operated the property since 1986.

Wescom currently has over $4.5 billion in assets and nearly 200,000 members. It has 24 branches throughout eight counties in Southern California.

To learn more about Wescom, visit www.wescom.org.