In the largest office sale in Long Beach this year, a 490,000-square-foot building was purchased by billionaire Neil Kadisha’s investment vehicle for $69 million in an all-cash transaction.
An affiliate of Beverly Hills’ Omninet Capital LLC bought the building at 1500 Hughes Way from an affiliate of New York’s Lexington Realty Trust, which bought it for an undisclosed price in 2009 from Raytheon Co., a Waltham, Mass., contractor.
The building, known as the Freeway Business Center, is only 75 percent occupied by tenants that include Jacobs Engineering Group Inc. and Fluor Corp. Raytheon occupied all of the building until it moved its offices to El Segundo three years ago after selling the building.
Omninet is operated by Kadisha, a Beverly Hills resident, who was ranked No. 34, with a net worth of $1.2 billion, on the Business Journal’s Wealthiest Angelenos list in May. It has been paying cash for underperforming commercial properties of more than 50,000 square feet and valued at more than $5 million in California and the Southwest.
Kevin Shannon, vice chairman in CBRE Group Inc.’s El Segundo office who represented the seller, said it was a competitive bid process to sell the building. He gave 15 tours of the property to potential buyers and received 11 offers on the property, with Omninet coming out above the rest.
“It was Omninet’s $10 million deposit that put them ahead of other offers,” he said. “Their ability to close quickly and on an all-cash basis allowed them to distinguish themselves from other investment firms competing for this deal.”
The sale was the second largest in Long Beach since 2007, when 1 World Trade Center sold for $149 million. It follows only the $81 million sale last year of the former Arco Center at 200 and 300 Oceangate, which the same CBRE team brokered.
Michael Moore, Dave Smith and Bill Bloodgood at CBRE also represented the seller.
DirecTV Inc. has renewed a 205,000-square-foot lease at one of the buildings at its El Segundo headquarters.
The satellite cable provider signed a deal with landlord Hines at 2230 Imperial Highway in one of the county’s largest deals last month. Terms were not disclosed, but industry sources believe it to be a 14-year lease valued at $50 million.
The offices are part of a four-building campus that the company has grown to occupy in the last year, including an adjacent three-building office complex at 2240 Imperial Highway owned by West L.A.’s Kilroy Realty Corp.
In November, the company signed a 630,000-square-foot lease for the buildings, called the Kilroy Airport Center. That 15-year deal, valued at roughly $400 million, was the largest in the state since early last decade. The Kilroy deal allows DirecTV to expand into an additional 90,000 square feet when other tenants vacate the property.
DirecTV now occupies about 530,000 square feet of total space in the area and plans to expand into 850,000 square feet of the recently leased space by the end of next year. The expansion will mostly be a consolidation of other regional locations.
Gary Horwitz, in Jones Lang LaSalle Inc.’s El Segundo office who represented DirecTV in the deal, said that the renewal sets DirecTV up to continue to operate on the campus, an environment it coveted for several years.
“That was the final piece of the puzzle,” Horwitz said.
The 55,000-square-foot former home of Warner Music Group Inc. traded hands last month for $13 million.
A joint venture of real estate veteran Jeff Worthe’s Centurion Real Estate Partners and Five Mile Capital Partners bought the four-story building at 3300 Riverside Drive in Burbank from Warner Music, which had owned it for several years.
Warner Music moved into new offices nearby, leaving the building entirely vacant.
Mesa West Capital provided $12.6 million in financing for the purchase and for improvements to the building to help lease it to another entertainment-related tenant.
Mesa West Principal Ronnie Gul said that his company felt confident that the new owners can be successful in their plans because the location is very close to several studios.
Last year, Mesa West provided financing for the joint venture’s acquisition of a 37,000-square-foot building at 4444 Lakeside Drive in Burbank from longtime owner-occupant Shamrock Holdings. That building was only 33 percent leased when purchased but was up to 100 percent within a year.
“It was a very familiar business plan,” Gul said. “Jeff Worthe, who is the operating partner, is very well experienced and has a lot of assets under ownership in Burbank and that gave us comfort.”
Staff reporter Jacquelyn Ryan can be reached at email@example.com or
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