July 18, 2019 — Newmark Knight Frank (NKF) and CBRE announced today the $50.8 million sale of a two-building 200,220-square-foot office campus in Los Angeles’ El Segundo submarket. Located at 650 and 700 Pacific Coast Highway (PCH), Boeing leases the property in its entirety through the end of 2020.
NKF’s Co-Head of U.S. Capital Markets Kevin Shannon, Executive Managing Director Ken White and Senior Managing Director Michael Moore, along with Bill Bloodgood of CBRE, represented the seller, a private family TIC (Tenant-in-Common). The buyer, New York-based Vella Group, was self-represented.
“This property has excellent street identity along PCH, an ideal location within the heart of the El Segundo market. That combined with the tremendous tenant momentum in El Segundo created an extremely desirable and competitive investment opportunity,” said Shannon.
“Once Boeing vacates the asset, the buyer intends on completely redeveloping and repositioning the property into a creative campus,” added Bloodgood. “The repositioning concept will be attractive to media, tech and entertainment tenants.”
The opportunity attracted a tremendous amount of investor interest with almost 160 buyers requesting information and more than 60 building tours, producing an extremely competitive managed bid process.
The entire site is situated on nearly six acres. Built in 1962, 650 PCH is eight floors and totals 121,484 square feet. Built in 1957, 700 PCH consists of one and two floors and totals 78,736 square feet. The property also includes 422 surface parking spaces.
El Segundo is the South Bay’s premier office submarket as reflected by a rent rate increase of approximately 34 percent over the last three years. Additionally, over the last five years, the submarket has drawn media, entertainment, technology and advertising tenant categories from pricier areas such as Playa Vista, Santa Monica, and downtown Los Angeles.
El Segundo offers advantageous business user taxes when compared to neighboring markets within the City of Los Angeles which subjects tenants to taxes on gross receipts and parking and significantly higher utility rates. The Los Angeles Economic Development Corporation has recognized El Segundo as the most business-friendly city Los Angeles County.