El Segundo's Continued Rise - Gateway El Segundo sells for $75M
El Segundo continues to be one of the most talked about markets in LA, right after Playa Vista. The Silicon Beach effect has increased the demand for office space on the Westside and companies who can't afford the high rents or simply can't find the right available space, are being pushed to peripheral markets like El Segundo. Furthermore, the lack of traffic, incredibly business friendly tax incentives, and proximity to the South Bay where many execs are living these days, has made El Segundo a market that most Westside companies at least want to consider. And the recent 100,000 SF, 15 year lease JustFab just committed to, presents a strong anchor tenant for other creative companies to feed off.
Miracle Mile developer J.H. Snyder Co. has sold a five-building office and retail complex it redeveloped in El Segundo in 2009.
DivcoWest, a real estate firm with dual headquarters in San Francisco and Boston, purchased the 339,500-square-foot Gateway El Segundo office park last month for $75 million, or about $220 a square foot. The transaction included $35.4 million in cash and the assumption of a $39.6 million loan from J.P. Morgan Chase, according to data service provider CoStar Group Inc.
The office park, at 300-460 N. Sepulveda Blvd., consists of about 328,000 square feet of Class B offices in three buildings and 11,500 square feet of retail in two smaller buildings. Both retail buildings were fully leased at the time of sale to casual restaurant tenants Five Guys Burgers and Fries, Rubio’s Fresh Mexican Grill, Which Wich Superior Sandwiches, Malibu Fish Grill and PizzaRev. The office buildings were each more than 90 percent leased. Tenants include a number of health care providers, such as US HealthWorks Medical Group, Semel Vision Care & Aesthetics and Westchester Medical Group.
DivcoWest said it was attracted to the property because it’s in an up-and-coming office market. “El Segundo is becoming a key Los Angeles growth market for media and technology-related companies and is a highly desired residential location for both executives and L.A.’s younger, well-educated workforce,” the company said in a statement.
That reputation is what made online retailer JustFab Inc. recommit to 15 more years in the area in March. El Segundo is considered one of the more affordable corners of Silicon Beach, with better access to large employee pools in the South Bay. Rents at the Gateway complex start at about $2.50 a square foot a month; rents for similar space in Santa Monica are considerably higher, closer to $3.50 a square foot a month.
*Shared by Jeff Vertun