Global information services giant EDS has committed to retain its 450-employee facility in El Segundo for another five years.
The Plano, Tex.-based company, which has been expanding some of its Southern California operations, had considered consolidating the El Segundo unit into a Sacramento facility.
But EDS now views the 130,000-square-foot El Segundo office as a key strategic location for its West Coast operations.
The company’s growing Air Transport division, which serves a half-dozen key airline data processing accounts from the El Segundo site, has added more than 50 new employees over the last year.
The facility handles airline reservation data processing, as well as bank check processing, auto loan servicing and other functions.
“It’s close to LAX, which is critical to our employees and our customers,” said Angela Takemoto, systems engineer executive with the El Segundo facility, within the Continental Park commercial center.
“We’re also just 500 yards from the new light rail facility. And since we specialize in travel and transportation here, we definitely appreciate the advantages of El Segundo,” Takemoto added.
The company had been subleasing the two-story El Segundo building since 1991 from Wells Fargo Bank, which inherited the lease obligation through its acquisition of Crocker National Bank.
As the sublease term’s expiration neared, EDS began considering various local alternatives, said Jay Borzi with Cushman & Wakefield Inc., the real estate consultant who handled the site search and lease negotiations on the tenant’s behalf.
EDS ultimately opted to remain at the El Segundo property and signed a new five-year lease directly with the building’s owner, an affiliate of Continental Development Corp.
No financial details of the transaction were disclosed, but real estate sources estimated the lease’s value at about $5 million. Borzi would only say that the new arrangement reduces EDS’s overall occupancy costs at the facility.
Borzi further said the EDS Air Transport division also occupies a nearby 60,000-square-foot facility within Continental Park. The company is looking to relocate that operation to a higher-quality facility of about the same size in the immediate neighborhood in the near future, Borzi added.
Bob Tarnofsky, Continental’s director of real estate, said EDS’s new five-year lease transaction illustrates the commercial renaissance underway along the Rosecrans Avenue corridor, which runs along the city boundary separating El Segundo and Manhattan Beach.
“It’s great to keep EDS here; there aren’t a lot of tenants out there needing more than 100,000 square feet,” Tarnofsky said, adding that Continental Park will soon have another high-profile restaurant tenant, McCormick & Schmick’s.