Fresh off its successful IPO last month and in anticipation of explosive growth, Monrovia-based Software Technologies Corp. is hunting for a large new office campus.
Chief Executive James Demetriades expects STC to commit to 400,000 square feet initially, growing to as much as a million square feet of low-rise office space in the next few years. He envisions an environment somewhat like Microsoft Corp.’s Redmond, Wash. campus.
“As a software company, it’s important to have a quality, central location and a quality campus,” Demetriades said. “We want a great campus for companies around the world to visit.”
STC hired Douglas Econn and Jerry Porter of Cresa Partners and Matthew May of Sachse Real Estate Co. to identify and evaluate potential campus sites throughout the L.A. basin.
Porter said STC is focusing on locations in Pasadena and Glendale, as well as the Westside, South Bay and other areas within L.A. County.
“They figure they’ll grow so substantially, they’re looking at a wide range,” Porter said. “It may be smaller and denser, or it may be more remote, more of a pioneering site.”
STC sells e-business integration software that allows business computer programs to communicate with each other, serving as a centralized, universal translator.
The company is considering various scenarios with regard to its future home: building its own campus, joint venturing, or being a tenant. Porter said STC executives have met with “some major developers with sites under their control,” as well as with city agencies. The company is working with the architecture firm HLW International on design aspects.
One possible scenario is for the company, on an interim basis, to serve as anchor tenant in a project with multiple tenants, then expand into the entire project over time, Porter said. Whatever option is selected, the deal is expected to be in excess of $100 million.
STC currently leases more than 100,000 square feet of space at 404 E. Huntington Drive in Monrovia, and has about 600 employees. Its goal is to be installed in a new home within the next 20 to 24 months, Porter said.
The company’s market capitalization is close to $1.5 billion. Although it has been losing money for the last two years, revenues are projected to nearly double this year and Demetriades expects STC to be in the black within the next year or two.
STC’s stock was trading at around $18 as of last week, up from its late-April initial offering price of $12.
Sale of the Century (Boulevard)
Decron Corp. sees a lot of potential on Century Boulevard, and proved it by its purchase last week of a somewhat infamous white elephant near LAX.
The Van Nuys-based investment company bought 5757 W. Century Blvd. for about $20 million and plans to invest another $10 million to $12 million in improvements.
“It’s definitely a building with a long history,” said David J. Nagel, president of Decron. “We think the timing is right because of the activity on the Westside, and we’re thinking Century Boulevard is going to become an attractive alternative. Where else in the city can you get 50,000 square feet on a floor?”
The 488,000-square-foot complex, sold by GE Capital, is about 50 percent leased. Built in 1981 in the rush of commercial development along the LAX corridor, the building has long been plagued by cracks, low ceilings, an over-abundance of support posts, and more. The location also lost its luster in the 1990s recession, as aerospace firms downsized.
But the Century Boulevard market has been rebounding in the past year. Its office vacancy rate is now about 23 percent, down from 31 percent a year ago, according to Grubb & Ellis Co.
Nagel said Decron plans to “make this a class-A” complex and to overhaul the common areas and parking. The plan is to link the tower and atrium buildings, increase ceiling heights and give the floors a more open look. The project is also getting a new name: Airport Spectrum.
“It has a lot of interesting possibilities for us,” Nagel said. “That’s why we bought it.”
Steve Solomon of Colliers Seeley International represented GE Capital in the deal.
West L.A. Sale
Brentwood-based Lowe Enterprises Investment Management Inc. has acquired the West Wilshire Center office complex on behalf of a pension fund client, for about $45 million.
The two-building complex consists of a 180,000-square-foot office building and a 55,000-square-foot medical office building, located at the intersection of Wilshire and San Vicente boulevards. The complex is 93 percent leased.
Rick Newman led Lowe’s acquisition team, along with Court Thomas. Bob Safai of Madison Partners also represented Lowe, and Steve Algermissen of Cushman & Wakefield represented the seller, West Wilshire Associates, a Wilson Cornerstone subsidiary.
Industrial Strength
Carson Cos. has signed several recent deals at the Dominguez Technology Center, including the first build-to-suit in a long time.
Epson America, which has its North American headquarters in Long Beach, has signed up for a 180,000-square-foot build-to-suit in the center. Brokers would not confirm the size of the deal, but sources estimated the value at about $6 million.
“We’re getting a lot of people taking advantage of redundant fiber optics and proximity to the ports of L.A. and Long Beach,” said John Schumacher of CB Richard Ellis Inc., who along with Jeff Morgan represented Carson Cos. Jim Biondi of Grubb & Ellis represented Epson.
The building will be used for warehouse and distribution of Epson’s computer-related products.
Three brand-new spec buildings in the center have also recently been leased. The tenants are SVG Distribution/Crave Entertainment, which distributes programs for handheld video games; Nakamichi America, which distributes and provides tech support for high-end audio components; and Stork USA, which tests metal parts for satellite and aerospace products.
Carson Cos. has also broken ground on another five spec industrial buildings encompassing a combined 650,000 square feet of space at the Technology Center, where the vacancy rate is virtually nil.
Elizabeth Hayes can be reached at (323) 549-5225, ext. 229, or at [email protected].
