October 9, 2019 — Newmark Knight Frank (NKF) has announced that an affiliate of San Francisco-based real estate investment firm The Roxborough Group, LLC in partnership with The Ruth Group, LLC (TRG), a Los Angeles-based investment and management firm, completed the sale of 5901 W Century Boulevard, located in Los Angeles, CA.
NKF’s Co-Head of U.S. Capital Markets Kevin Shannon, Senior Managing Director Michael Moore, and Executive Managing Directors Ken White and Sean Fulp represented the seller. The buyer, a partnership led by North Sea Capital, was self-represented. NKF’s David Milestone and Brett Green represented the buyer in securing a $39.71 million loan for acquisition financing.
“Our partnership was attracted to the tremendous mark to mark upside with the well below market average existing rents in conjunction with the great basis,” said Scott Burrin founder of North Sea Capital.
The 15-story, 92 percent leased, 306,243-square-foot office tower is located along Century Boulevard in the LAX submarket. Along with recent building systems upgrades, 5901 Century has been heavily rebranded and features a newly renovated lobby and common areas, an executive clubhouse, dog park, and a bicycle-sharing program.
The property benefits from its proximity to LAX and to numerous affluent coastal neighborhoods as well as excellent access to the 105 and 405 freeways. Century Boulevard has recently undergone a dramatic transformation as several competitive office buildings in the area have been converted into hotels which has reduced the office supply and improved the amenity base. In addition, an extension of the Metro Green Line at the intersection of Century and Aviation is a short walk from the property. The completion of this station was the first amongst many new public infrastructure projects in and around LAX, including a new rental car facility, an automated people mover connecting the airport with the metro line, and a second green line station at 96th and Aviation.
“5901 Century is located in a unique coastal location experiencing dramatic changes, yet remains an affordable option for tenants priced out of Playa Vista, El Segundo, and other Westside “Silicon Beach” submarkets,” said Managing Director of The Roxborough Group, Matt McCormick. “We are very pleased that, together with The Ruth Group, we were able to execute the business plan and the vision for 5901 Century, successfully repositioning the asset into a premiere creative office destination.”
“The Ruth Group believed strongly in the potential of 5901 Century,” Bob Ruth, Principal at The Ruth Group, stated. “With the Project situated between two of the most exciting markets in Los Angeles, immediately south of Silicon Beach and just north of El Segundo, 5901 Century offers exception regional access and proximity to executive housing in the South Bay. Coupled with the nearby $14B capital improvements plan currently underway at LAX and the excitement surrounding the new LA Stadium and Entertainment District, and the LAX submarket will continue to attract quality tenants searching for an economic alternative to the more expensive surrounding areas.”
“The seller acquired the asset in early 2017 and invested in excess of $8 million to renovate and reposition the property. The seller completed more than 220,000 square feet of new leases, expansions and renewals during that short timeframe at rents up to and exceeding $3.00 FSG, which are historic highs and demonstrates amazing leasing velocity for this submarket,” said Shannon. “The recent significant value creation, as well as the future lease-up of the remaining vacancy, resulted in this offering being very well received by the marketplace.”
Moore added, “NKF educated interested capital on the massive competitive per square foot advantage that Century Boulevard enjoys compared to El Segundo, where vacant buildings are selling for over $400 per square foot, and Playa Vista/Culver City, where recent leased building sales exceed $900 to $1,100 per square foot. Five office buildings totaling approximately 1 million square feet have been removed from the LAX inventory and converted into hotels in anticipation of the LAX expansion and the new LA Stadium & Entertainment District at Hollywood Park down the street in Inglewood which will benefit the LAX submarket.”