After getting a taste of the creative office market in Playa Vista, New York real estate firm Tishman Speyer set its sights on the blossoming market in El Segundo.
Late last month, the company bought a 260,000-square-foot low-rise flex building at 555 S. Aviation Blvd. for $45 million, or roughly $170 a square foot. The seller was the Larry & Laura Worchell Family Trust.
Tishman plans to convert the building into a creative office campus, said Mark Laderman, the firm’s regional managing director.
The building is fully occupied by Xerox Corp., which has a lease for almost two more years. Once it vacates, Tishman will begin a multimillion-dollar renovation, Laderman said.
The single-story building has 17-foot ceilings, so it’s basically a large box. Tishman plans to cut portions out of the property to build atriums that will let in light.
This is the firm’s first true venture with creative office outside of Playa Vista. Tishman developed the Campus at Playa Vista at 12045 W. Waterfront Drive, home to the L.A. offices of Facebook Inc. It also developed the Collective campus at 11975-10215 W. Bluff Creek Drive, which Yahoo Inc. recently moved into, and the recently completed Brickyard campus at 12105 and 12126 W. Waterfront.
Chris Sinfield and Tom Sheets of Cushman & Wakefield represented both the buyer and the seller in the transaction. David Hasbrouck also represented the seller.
Bloc Lease
Santa Monica design firm DLR Group is moving its headquarters to downtown Los Angeles.
Late last month, the firm signed a lease for 35,400 square feet at the Bloc, owned by downtown developer Ratkovich Co. It will occupy the 22nd floor and some of the 23rd at the 737,700-square-foot Class A office at 700 S. Flower St., part of a block-long mixed-use complex. The building is still being renovated but is 86 percent leased.
DLR’s 11-year lease is valued at $18 million.
“Our company is a national and international company and a Los Angeles address is important to us now,” said Adrian Cohen, a senior principal at DLR.
The lease will consolidate the firm’s Santa Monica headquarters and Pasadena office. Downtown Los Angeles made sense as a middle point for staff relocating from those places, Cohen said, especially because of its proximity to public transportation. The Bloc is adjacent to the Seventh Street Metro Center rail hub.
Cohen said the firm, which employs 125 people, will grow to 135 or 140 by the time it moves to the Bloc in about a year. The extra 5,400 square feet will allow the head count to reach 150.
The firm will design its own space as a showroom for clients.
Darren Eades, Mike McKeever and Jordan Gaffney of Jones Lang LaSalle Inc. represented DLR in the deal. John Zanetos and Christopher Penrose of CBRE Group Inc. represented Ratkovich.
Record Year
A recently reported office building sale in Beverly Hills that clocked in at $1,100 a square foot turns out not to have been the highest per-foot price paid in the city.
A 14,300-square-foot Class B office building at 9430-34 Wilshire Blvd. traded for $18.6 million, or roughly $1,300 a square foot June 19. One day earlier, the Kenquest building at 499 N. Canon Drive sold for almost $40 million, a whopping $1,500 a square foot.
Investment firm Kenquest Inc. sold its 28,000-square-foot Class B namesake office to Shawn Akhlaghfar. Bill Simpson, Rick Hilton, Jeff Hyland and Carol Dotson of Hilton & Hyland represented the seller. Felix Pena and Richard Maslan represented Akhlaghfar in the deal.
The building is fully occupied by tenants that include newspaper Beverly Hills Courier and restaurant 9021PHO.
The all-time record per-square-foot price, however, belongs to the Wilshire Roxbury, a 42,115-square-foot Class B office at 9680-96 Wilshire, which sold last year for a $1,800 a square foot.
In a tight market like Beverly Hills, where companies lust after the 90210 ZIP code, when offices trade, they trade high.
Staff reporter Hannah Miet can be reached at [email protected] or at (323) 549-5225, ext. 228.
