Red Sea Sells Again

The El Segundo Research Center includes two two-story office buildings of 126,000 sf and 80,000 sf at Continental Avenue and Mariposa Street. Its sale marks the third time the project has traded in the past two years, with all three deals brokered by Bob Safai of Madison Partners, who represented Red Sea in the latest transaction. The 126,000-sf building is at 501 Continental, and the 80,000-sf property at 1940 Mariposa.

Safai calls the El Segundo property "a rare value-added opportunity" for the buyer because of the location and amenities, including ample parking. Kralis tells GlobeSt.com that the 125,000-sf building, which was built in the mid-1980s and was formerly occupied by Hughes Aircraft, represents a good value-added opportunity for either a single user to occupy the entire building or for full-floor tenants on each of the floors. Kralis says that was Red Sea's idea when it bought the building. Since Red Sea bought the property in 2003, he says, "The market has accelerated significantly, with many more buyers than sellers now, so this was a great opportunity to be a seller."

The 80,000-sf building is already being sold again for nearly $15.4 million in a separate transaction now in escrow and expected to close April 25, according to Safai, who reports that the buyer is Legacy Partners. The building is fully occupied by two tenants, Telasic Communications and a Fujitsu subsidiary called Glovia International.

Although Red Sea has recently sold the El Segundo property and an office building in Grand Prairie, TX, Kralis says that the L.A.-based investment firm is still a buyer. The company is looking value-added opportunities either through improving properties via physical upgrades, retenanting or other strategies, he says, with its primary focus on properties in Texas, Northern and Southern California, Seattle and Denver. "We think the market fundamentals in those areas are such that, as the economy improves, they historically improve along with it," Kralis tells GlobeSt.com. "Our idea is to continually expand our range of influence and our asset base throughout the primary growth areas of the United States, and those are pretty much the major growth areas as we see them," he says.