Tishman Speyer Acquires $82M Office Building

Tishman Speyer will also manage the Continental Grand Plaza II, which is 90% leased, with primary tenants including Boeing, Regus Business Centers and Learning Tree International. Built in 1999 and owned by MetLife since 2001, the six-story institutional-quality building is situated at the intersection of Continental Boulevard and Grand Avenue in El Segundo's Superblock area.

John Miller, senior managing director at Tishman Speyer, says that the company believes that the El Segundo market "holds considerable promise over the next few years" after posting positive absorption over the past 11 quarters. He points out that the market benefits from a tight nearby West L.A. submarket and a lack of new construction. In addition, Miller comments, the acquisition "increases our presence overall in Southern California, in keeping with our investment strategy."

The sale to Tishman Speyer was brokered by Jay Borzi, Steve Silk, Stephen Somer and Kevin Crummy from Eastdil Secured. Mark Laderman of Tishman Speyer repped the buyer from in-house.

Tishman Speyer's new asset is located in a South Bay submarket that has shown considerable improvement in the last year, according to the latest market reports by CB Richard Ellis and Grubb & Ellis. CBRE's report shows the vacancy rate declining by nearly three percentage points to about 15.9% over the past year, while Grubb & Ellis notes that the investment market in the South Bay "is also benefiting from what is believed to be undervalued leasing fundamentals."

According to Grubb & Ellis, the South Bay "is second only to the Mid-Wilshire submarket as having the most affordable office space." Grubb & Ellis tracks the South Bay as a 31-million-sf market with a 16% vacancy rate and CBRE tracks it as a market of 27 million sf with a 15.9% vacancy rate.