LOS ANGELES—El Segundo values are on the rise. Colony Capital has sold 550 Continental in El Segundo, a 97,445-square-foot office building because of the strong market fundamentals, and saw incredible demand for the sale of the asset. Brightforward LLC purchased the property for $30.5 million.
“There is always strong competition in El Segundo these days, which is a blossoming lower Westside market,” Kevin Shannon, president of the West Coast capital markets group at Newmark Grubb Knight Frank, tells GlobeSt.com. “El Segundo has benefitted from a rapid rise in rents in West LA. It's a coastal market with no gross receipts tax and an increasing supply of creative office product.” Shannon represented the seller in the transaction, along with his capital markets group colleagues Ken White and Mike Moore, as well as CBRE SVP Bill Bloodgood and SVP Dave Smith. NGKF managing director David Ghermezian represented the buyer.
The property has an interesting history, which helps to illuminate the value history in El Segundo. Colony Capital purchased the property in 2007 from Legacy Partners for $21.2 million, but Legacy Partners had purchased the property two years earlier in 2005, at the height of the last cycle, for $32.5 million. So, this most current sale, while a significant $10 million value play for Colony Capital, still has not reached prior peak levels. “This disposition was driven by fund timing and by the favorable El Segundo market conditions,” adds Shannon.
550 Continental is a garden-style campus with glass exterior detailing, efficient floor plates and traditional bay depths. It is currently 97% leased, with 70% of the property occupied by Time Warner Cable, which has been a tenant since 1991. The El Segundo market has more than 1 million square feet in office product under development and is attracting creative and tech tenants from other West Los Angeles markets that are both expensive and supply constrained. As a result, this property has a good repositioning opportunity. “The beach cities of El Segundo, Manhattan Beach and Hermosa Beach have become one of L.A.'s premier live and work environments. This property provides a strong repositioning strategy to substantially increase cash flow by converting the building into creative office space, making it a strong investment opportunity,” says Shannon, adding that there are currently 200,000 square feet of tenants negotiating in the market.
LOS ANGELES—El Segundo values are on the rise. Colony Capital has sold 550 Continental in El Segundo, a 97,445-square-foot office building because of the strong market fundamentals, and saw incredible demand for the sale of the asset. Brightforward LLC purchased the property for $30.5 million.
“There is always strong competition in El Segundo these days, which is a blossoming lower Westside market,” Kevin Shannon, president of the West Coast capital markets group at Newmark Grubb Knight Frank, tells GlobeSt.com. “El Segundo has benefitted from a rapid rise in rents in West LA. It's a coastal market with no gross receipts tax and an increasing supply of creative office product.” Shannon represented the seller in the transaction, along with his capital markets group colleagues Ken White and Mike Moore, as well as CBRE SVP Bill Bloodgood and SVP Dave Smith. NGKF managing director David Ghermezian represented the buyer.
The property has an interesting history, which helps to illuminate the value history in El Segundo. Colony Capital purchased the property in 2007 from Legacy Partners for $21.2 million, but Legacy Partners had purchased the property two years earlier in 2005, at the height of the last cycle, for $32.5 million. So, this most current sale, while a significant $10 million value play for Colony Capital, still has not reached prior peak levels. “This disposition was driven by fund timing and by the favorable El Segundo market conditions,” adds Shannon.
550 Continental is a garden-style campus with glass exterior detailing, efficient floor plates and traditional bay depths. It is currently 97% leased, with 70% of the property occupied by
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