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LOS ANGELES-A partnership of Kearny Real Estate Co. and Morgan Stanley Real Estate Fund V has acquired a 92-acre, 2.7-million-sf manufacturing facility in Hawthorne from Vought Aircraft Industries for $65 million in a combination sale-leaseback and redevelopment play. Kearny managing director Jeff Dritley says the purchase by MS Kearny Northrop Avenue LLC will complement its investments in the nearby Los Angeles Air Force Base and Hawthorne Airport.

The Vought property occupies a site near the intersection of the 405 and 105 freeways, immediately south of the Hawthorne Municipal Airport. The sale includes 28 industrial and manufacturing buildings, two office buildings, a wind tunnel and one hangar currently leased to Northrop.

Vought, one of the world’s largest independent suppliers of aerostructures, will lease back the entire property for six months as it consolidates its operations. Once the consolidation is complete, Vought will continue to lease nearly 1.4 million sf, including a one-million-sf building used to manufacture Boeing 747 fuselages and 767 aft body panels. Total consideration for the lease, which expires in 2010 with options through 2020, is $15 million.

The partnership plans to market some of the existing buildings and redevelop the remainder of the site for a variety of commercial and industrial uses. Some of the site may also be converted to hangars and other aviation related uses for the adjacent Hawthorne Airport, also known as Jack Northrop Field.

Dritley says that locally based Kearny became interested in the Vought site during Kearny’s extensive involvement with the community during the approval process for its work at the Los Angeles Air Force Base. “We have been tracking the potential sale of the Vought site since late 2002,” he says. The chance to control and develop the combined 172-acre block “was almost irresistible,” he says.

Under a separate partnership, Kearny Real Estate Co. and an affiliate of VX Holdings control the non-runway portions of the airport through a 45-year ground lease executed with the City of Hawthorne in January 2005. The ownership is currently upgrading or demolishing the existing 157,000 sf of hangars and other aviation related buildings at Hawthorne Airport and plans to develop an additional 190,000 sf of new hangars to meet the demand. There is currently a three-year waiting list for the existing hangars, according to Dritley.

Morgan Stanley Real Estate Fund and Kearny are developing the new 542,000-sf Space and Missile Systems Center office campus at Los Angeles Air Force Base in El Segundo, along with Catellus Development Corp. The air base project is expected to be turned over to the Air Force in January.

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