51-Acre Land Site Trades Hands in Redondo Beach
A private investor purchased the rare site, located at the AES Redondo Beach Power Plant.
“The plant was scheduled to be shut down due to the prohibition of power plants that use once-through cooling systems in California. The coming mandatory plant shutdown led to placement of the site on the market,” Kevin Shannon, co-head of U.S. capital markets at Newmark Knight Frank, tells GlobeSt.com. Shannon represented AES Corp. in the deal on a team led by CBRE’s EVP Laurie Lustig-Bower and VP Kadie Presley Wilson and with NKF’s executive managing director Ken White and senior managing director Scott Schumacher.
In the future, the buyer plans to develop the site, and will work alongside the city to find a site for approval. “The site is currently unentitled so it is a blank canvas with enviable scale perfect for an iconic mixed-use development,” says Schumacher. “The buyer will work with the Redondo Beach city council to come up with a mutual agreeable development plan, which will include open park space and public access as well as office and retail components. This scale in a mature infill coastal market like the south bay is truly a generational opportunity.”
This is a rare piece of land with generational opportunity, and so it was no surprise that the property received strong interest. Shannon wasn’t specific about the types of investors who bid on the deal, but says, “We received strong interest from a large group of both domestic and international developers and capital partners.”
This deal was negotiated before the current financial crisis, but would likely still have been popular today, due to the rarity of a site this size in Southern California. “This is a rare development opportunity and the buyer has a long-term horizon, which will not be impacted by the current crisis. The power plant will continue to operate while the planning for the site progresses,” says Schumacher.
Due to the public nature of the site, development will require community approval. “The City of Redondo Beach is required to vote on the ultimate development plan, which will be placed on the ballot so the ultimate mixed-use plan will be subject to community approval,” says Shannon. “The 51 acres, while truly significant in size, is substantially more desirable given its immediate adjacency to king harbor and the Santa Monica bay.”