DivcoWest has doubled down on its bet on the strength of the El Segundo office market.
The real estate firm, which has dual headquarters in San Francisco and Boston, purchased Continental Grand Plaza late last month from New York real estate company Tishman Speyer. The 490,000-square-foot, two-building complex went for about $124 million, or approximately $253 a square foot, according to real estate data provider CoStar Group Inc.
The complex at 300-400 Continental Blvd. is the second major purchase DivcoWest made in the area in as many months. In April, the firm purchased the 339,500-square-foot Gateway El Segundo office park at 300-460 N. Sepulveda Blvd. for $75 million, or about $220 a square foot.
The Continental Grand Plaza office park, built in 1999, is on a popular corporate corridor in El Segundo, across the street from Mattel Inc.’s headquarters building and behind the Toyota Sports Center, where the Los Angeles Lakers train. When the sale closed May 23, the six-story, Class A office buildings were about 83 percent leased. Tenants include the Los Angeles Kings, Hilton Worldwide, Japan Airlines, Beach Body and Regus Executive Suites.
DivcoWest was attracted to the property’s proximity to executive housing communities, Los Angeles International Airport and a Metro Green Line light-rail station.
“The acquisition gives DivcoWest a second investment in what they believe is becoming a key Los Angeles growth market for media and technology-related companies,” the company said in a statement.
Steve Solomon, a managing director in the El Segundo office for Jones Lang LaSalle Inc., said the beachside submarket has gained popularity in the last year or so as executives who live in the South Bay want to avoid long commutes and higher prices that come with a more prestigious address.
“In general, Class A office space in El Segundo is still a significant discount to Century City, Santa Monica and Beverly Hills, so a lot of these tenants can be in really nice, comparable office space and pay half the rent,” he said.
In the first quarter this year, the average asking rent for Class A office space in El Segundo was $2.67 a square foot a month, compared with $4.62 in Beverly Hills, $4.27 in Century City and $4.48 in Santa Monica, according to data supplied by Jones Lang LaSalle.
Real estate brokerage Eastdil Secured represented Tishman Speyer in the transaction; DivcoWest handled negotiations internally.
Downtown Deal
A 24-story building above the Seventh Street subway station in downtown Los Angeles sold out of foreclosure last week for $72.5 million, or about $267 a square foot.
Figueroa Tower, a Class A office property at 660 S. Figueroa St., sold to downtown firm Jade Enterprises. Special servicer C-III Asset Management sold the property after foreclosing on it more than a year ago. Its previous owner, WhiteRock Realty Solutions of Encino, had defaulted on a $67 million loan that, including interest and fees, had ballooned to $85.5 million in debt.
The marble French renaissance-style office building with two-story lobby, built in 1987, was designed by downtown architecture firm A.C. Martin and inspired by the Plaza Hotel in New York.
Upon closing on the property, Jade hired Cushman & Wakefield to lease the tower, which was only about 48 percent occupied at the time of sale. Brokers on the team include Rich Grande, Michael Seidman and Alex Cameron, directed by Andrew McDonald.
Grande said that he expects the tower will prove attractive to tenants looking to lease space downtown.
Revolving Doors
Downtown L.A. engineering and technical services firm Aecom Technology Corp. last month named Rick Heinick executive vice president and chief human resources officer. Heinick joined Aecom from eye care company Bausch + Lomb, where he served in a similar role. … DesignARC Los Angeles, a multidisciplinary architecture and interior design firm in Rancho Park, last month named Yo-ichiro Hakomori a design principal. Hakomori, who co-founded wHY Architecture in Culver City, joined the firm with extensive experience in design and management of civic, commercial, educational and residential projects. His most notable work has been for art museums, including the Grand Rapids Art Museum in Michigan, galleries for the Art Institute of Chicago and Pomona College Studio Art Hall. Hakomori will work with DesignARC co-founders Dion McCarthy and Mark Kirkhart on commercial and residential projects.
Staff reporter Bethany Firnhaber can be reached at [email protected] or (323) 549-5225, ext. 235.
