(To read more on the industrial market, click here.)

HAWTHORNE, CA-Kearny Real Estate Co. has started construction on its 204,000-sf Century Business Center, which will consist of 18 buildings ranging from 5,000 sf to 21,000 sf that will be targeted toward owner-users. The project site is near the intersection of the 405 and 105 freeways, immediately south of the Hawthorne Municipal Airport.

A partnership of Kearny Real Estate Co. and Morgan Stanley Real Estate Fund V acquired the site as part of a property that it bought in 2005 for $65 million. The 18 structures in the new development will include 15 freestanding buildings and six industrial condominium units, most with up to 20% office build-out and potential for additional build-out.

To make way for the new development, Kearny demolished 350,000 sf of obsolete buildings on the 86-acre site. Since taking ownership, Kearny also has sold 10 of 12 existing industrial and manufacturing buildings totaling nearly 700,000 sf and is marketing for sale the last two buildings of 28,000 sf and 58,000 sf.

The remaining 1.38 million sf of space at Century Business Center is occupied by Vought Aircraft Industries. Kearny also has additional land to accommodate a 100,000-sf build-to-suit client or will develop it as part of Phase II.

Kearny says that the second phase may include hangars and other aviation-related uses for the adjacent Hawthorne Airport. Under a separate partnership, Kearny and an affiliate of Vx Holdings control the non-runway portions of the airport through a 45-year ground lease that they executed in January 2005.

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