The 1940s-era Spruce Goose hangar in Playa Vista might be an unfinished shell, but that didn’t stop the building from holding its own in the trendy office market with a recent sale price of $270 million.
Having a high-profile tenant in Google, which is renovating the property, could have made the iconic hangar even more appealing in last month’s sale, which also included several surrounding buildings.
A deed filed Dec. 22 with the Los Angeles County’s Registrar/Recorder’s Office listed the sale price, which was on par with values of nearby modern office campuses, and named the buyer as a limited liability entity, Alkema Magnvs Lap.
Holliday Fenoglio Fowler, which represented sellers Ratkovich Co. and Penwood Real Estate Investment Management, identified the buyer only as a “diversified Japanese corporate investor.”
“It’s a long-term, cash-flow play,” said John Crump, HFF director. “With the world-renowned tenant that we have there, there was interest from all parts of the globe.”
HFF’s Michael Leggett, Doug Bond, and Ryan Gallagher assisted on the deal.
The buyer was represented by EGW Asset Management Inc., a real estate services firm based in Tokyo, according to a news release announcing the sale. The Los Angeles Times reported that the buyer’s parent company is ASO Group, citing an unnamed source. Based in Iizuka, Japan, ASO operates subsidiaries in the fields of infrastructure, environmental services, health care, and education.
Representatives at Ratkovich and Penwood did not respond to requests for comment.
The deal for the hangar and side buildings equates to $754 a square foot, on par with recent Playa Vista trades that valued Class A offices at prices ranging from $740 to $840 a square foot.
Real estate analysts had been hesitant to gauge the value of the Spruce Goose hangar ahead of its sale, uncertain of how to quantify the worth of an empty shell made of layers of glued wood. The building contains two sections measuring 750 feet by 100 feet under a roof peaking at 72 feet.
Aviator Howard Hughes built the site in the ’40s to house his 200-ton cargo plane, Hercules, which was nicknamed the “Spruce Goose” despite being built mostly of birch. By the 1990s, the site became a Hollywood soundstage, housing productions including “Titanic” and “Avatar.”
Ratkovich nabbed the property in 2010 when it purchased 28 acres of Hughes’ former offices for $34.2 million.
Google is at work on renovations that will eventually create 418,600 square feet of office space on three floors and a mezzanine, according to HFF’s marketing materials, bulking up from 251,674 square feet.
The other buildings in Google’s lease, which sold as part of Hercules Campus West, offer an additional 56,487 square feet and are not set to be expanded.
The tech giant has the option to buy the hangar at the end of its 16-year lease, which has three five-year renewal options. It also owns 12 acres of land next door, but has not yet announced development plans.
New Colony
A real estate investment goliath will be born this month when Colony Capital Inc. completes a massive merger.
Colony Capital, based downtown, agreed in June to merge with NorthStar Asset Management Group Inc. and NorthStar Realty Finance Corp., both of New York. The new company will be called Colony NorthStar Inc. and will have $58 billion in assets.
Colony Capital Executive Chairman Thomas J. Barrack Jr. will serve in the same role in the resulting firm.
“This merger is the result of decades of long line relationships by all three companies aligning into one powerful, global real estate and real asset investment manager,” he said in a recent statement.
The combined company aims to enjoy cost savings, access to new capital, and a stronger balance sheet as a result of the merger, according to the statement.
Colony has invested more than $60 billion through various funds and investment vehicles over the past 25 years. Its investments include offices, hotels, Napa vineyards, Swiss hospitals, and a stake in Sam Nazarian’s SBE hospitality group.
Barrack ranked 38 on the Business Journal’s Wealthiest Angelenos list in May with a net worth of $1.53 billion.
Santa Monica Multifamily Sale
A new apartment building in downtown Santa Monica has sold for $83 million, or $783,000 a unit.
ASB Real Estate Investments of Bethesda, Md., announced the acquisition last week of the recently constructed two-building, Class A apartment-retail complex, called the Gibson Santa Monica. The property was purchased from CG Seventh Street, a joint venture of Century West, Cypress Equity, and Cigna on behalf of ASB’s Allegiance Fund, a $6.2 billion real estate investment vehicle.
The building at Seventh Street and Arizona Avenue was completed in 2015.
Staff reporter Daina Beth Solomon can be reached at [email protected] or (323) 556-8337.
