Two large lease deals have recently been brokered at 1500 Hughes Way in Long Beach, long the home of Raytheon Co.
The defense contractor will leave its offices at the 490,000-square-foot property at the end of the month in a move to El Segundo, where it already has a large presence. That clears the way for engineering firms Fluor Corp. and Jacobs Engineering Group Inc. to take its place. The building is near the intersection of the 405 and 710 freeways.
“Both companies do work with the refineries that are nearby, such as BP and Tesoro,” said Dave Smith, a CB Richard Ellis Group Inc. broker who represented the landlord in the lease deals.
Irving, Texas-based Fluor signed a five-year lease for 86,610 square feet with the landlord, an entity of New York-based public real estate investment trust Lexington Realty Trust. The lease is valued at $10 million. Jacobs of Pasadena signed a 10-year lease for 83,823 square feet in a $24 million deal.
The deals are both in the range of $1.80-$1.85 per square foot per month on a modified gross basis. Tenants at the building pay for utilities and janitorial services, Smith said.
Lexington will do rehab work to bring the building to Class A standards and renovations will begin in January.
The four-story building is broken up into three sections and Jacobs will occupy the third and fourth floors of the “C pod.” Fluor is already a tenant at the property it has been subleasing space from Raytheon and will continue to occupy the second and third floors of the “B pod,” Smith said.
The Jacobs deal closed a month ago and the Fluor lease closed two months ago. Molina Healthcare signed a 10-year lease for 158,073 square feet at the property earlier this year. There is about 160,000 square feet of vacant space left at the building.
Phil Brodkin and Bill Bloodgood of CB Richard Ellis also represented the landlord. Fluor was represented by Rick Kaplan and Chris Bosley of Cushman & Wakefield Inc., and Jacobs was represented by Eric Olofson of Cushman & Wakefield.
Apartment Sale
MG Properties & Investment Real Estate of San Diego has purchased a 138-unit apartment building in West Covina for $15 million, an amount significantly below the asking price.
MG and partners Viewridge Apartments LP and GJS Atrium LLC, two real estate investment entities, purchased the building Dec. 5 as tenants-in-common. The seller was Pacific Property Co. of Palo Alto.
The deal for the 50-year-old apartment complex at 1829-1841 E. Workman Ave. breaks down to about $108,696 per unit. The property is called then Atrium at West Covina.
The property was listed in July for $19 million. It had been on the market for two months before the deal was first struck. The sale price reflects an adjustment to current market valuations.
The new owners will spend about $3 million on exterior and interior renovations, with the work beginning in January.
“Once they finish renovations they plan on boosting rents,” Zander said.
The building has 40 one-bedroom units, 78 two-bedroom units, 18 three-bedroom units and two studios. The average monthly rental rate is $1,260 and the property had a 7 percent vacancy at the time of the sale.
Pacific Property had owned the building since 2004 with equity partner BlackRock Co., a New York-based money manager.
Hendricks & Partners broker Dean Zander represented both sides of the sale.
Hawthorne Lease
San Francisco-based AMB Property Corp., an industrial landlord and developer, is converting its industrial building at 12530 S. Prairie Ave. in Hawthorne to a business-to-business store for Costco Wholesale Corp.
Terms of the 15-year deal for the 128,000-square-foot building weren’t disclosed. The deal closed Nov. 1. The store will be Issaquah, Wash.-based Costco’s first business-to-business outpost in Southern California and will serve companies with large orders.
AMB has owned the property, called Hawthorne LAX Cargo, since 2000. The previous tenant, Forward Air, a logistics company, left in March 2007.
Costco will move into the building in March.
Jeff Kernochan of Fischer & Co. and Dave Drummond of Colliers International Property Consultants Inc. represented AMB. Steve McArthur of Northwest Atlantic and Jay Jasaitis of Larem represented Costco.
Staff reporter Daniel Miller can be reached at [email protected] or (323) 549-5225, ext. 263.
