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HAWTHORNE, CA-A joint venture of Kearny Real Estate Co. and Morgan Stanley Real Estate Fund V has started construction on a $45 million, 21-building industrial complex totaling more than 203,000 sf. The JV, operating as MS Kearny Northrop Avenue LLC, is developing the new complex within Kearny’s Century Business Center, a 2.3-million-sf office and industrial campus that formerly served as a manufacturing facility for Vought Aircraft Industries.

Kearny acquired the 86-acre site in July 2005 and leased back nearly 1.4 million sf of space to Vought, which manufactures Boeing 747 fuselages and 767 aft body panels. The property is immediately adjacent to the Hawthorne Airport, which Kearny controls through a 45-year ground lease with the City of Hawthorne. The site has immediate access to Interstate 105 at Crenshaw Boulevard.

Ranging from 5,700 sf to 20,700 sf, the new industrial buildings are expected to be ready for occupancy by January 2008. Kearny razed approximately 350,000 sf of obsolete buildings and aircraft hangars in repositioning the property to make way for the new development.

At the same time that it was preparing the site for the new development, Kearny marketed the remaining 15 buildings to a variety of users in transactions exceeding $48 million. Kearny Real Estate partner Hoonie Kang observes that the variety of businesses that have taken the former Vought space at the Century Business Center illustrate how the local economy is no longer solely dependent on aerospace, a change that is a healthy sign for the region’s economy.

Kearny has retained Jeff Kernochan of Fischer Corporate Real Estate Services to market the new project, which will feature fully sprinklered buildings, 24-foot clear heights, ground level (with larger buildings including dock high) loading, individual fenced yards, and office build-outs up to 2,000 sf. All 21 buildings will be located within a 24-hour security gated complex.

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