Companies with office needs on the Westside are continuing to turn to the South Bay in search of less expensive rents. At a new office complex in El Segundo, companies are foregoing renting altogether, instead purchasing buildings.
Despite the credit crunch, sales are going briskly at the Edge, a 15-building project located inside the 47-acre Campus El Segundo master-planned business park.
The project opened in mid-April and already nine buildings have been sold, with two more deals pending. The 200,000-square-foot Edge, between Nash and Douglas streets at Atwood Way, caters to midsize businesses, with the largest building just 20,000 square feet.
"Users have come from West L.A. due to the higher rental rates and the desire to control occupancy costs," said Bill Bloodgood of CB Richard Ellis Group Inc., who is selling the office units.
The project was developed by San Francisco-based AMB Property Corp. and Torrance-based developer Mar Ventures Inc. AMB purchased the property in 2006 from Thomas Properties Group Inc., the developer of Campus El Segundo.
So far, sales have been in the $355- to $400-per-foot range. At least two buyers at the project are relocating from the Westside. Formula PR is moving from Marina del Rey and Telenet VoIP Inc. is moving from Culver City. Other tenants include Xceed Financial Credit Union, which has purchased three buildings, and Thomas Properties.
Another downtown condo building has been converted into a for-rent apartment property, signaling the continued decline in the area's residential market.
Prospective buyers at the Chapman building had planned to close on their units in the coming weeks, but developer Mark Farzan said that the building would be converted to a for-lease property. Farzan didn't pin his decision to switch the 13-story adaptive reuse building at 8th Street and Broadway on a lack of demand instead, he said it was simply a function of buyers being unable to qualify for their loans.
"Many could not get home loans due to the changes in underwriting guidelines," said Farzan, who noted deposits were put down for more than 90 of the project's 163 units.
Farzan said he was very disappointed to make the change, but added that he is prepared to hold on to the property until the market can support condo sales.
Other downtown condo projects to go rental in recent months include Artisan on Second and Ten Ten Wilshire.
Chapman units were offered in the $300,000-$950,000 range and now will be rented out in the $1,400- to $3,500-per-month range.
For reprint and licensing requests for this article, CLICK HERE.
Stories You May Also Be Interested In
- SPACE---Vacant Spec Buildings Mount
- Downtown L.A. Developer Goes on Offensive
- SOUTH BAY: Westside Migration, Organic Growth Boosts Office Market
- Sold on Future
- Developer Gives Bank Equity Stake in Property
- Financing Is Coming Into Focus for Kalantari Building
- Developer Puts Condo Project in Chapter 11
- 'Always an Optimist, Always a Fighter'