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Sunday, Sep 24, 2023

The Business Digest

B2 bombers will soon give way to feathers in Pico Rivera.

Pacific Coast Feather Co. has leased a 335,000-square-foot build-to-suit being developed by Majestic Realty Co. on Rex Road. The 10-year deal is valued at $16.8 million.

The project is being built on a 43-acre site Majestic acquired from Northrop Grumman Corp., which is winding down operations at its adjacent B2 plant and disposing of the lion’s share of the property there for redevelopment into new industrial space, as well as retail.

Seattle-based Pacific Coast Feather, which manufactures and distributes bed covers, quilts and pillows, is currently in two smaller buildings elsewhere in Pico Rivera. It plans to consolidate into its new regional facility in October with about 400 employees. Louis Tomaselli and Rob Socci of Voit Commercial Brokerage represented Majestic, while Ken Coward and Scott Heaton of the Seeley Co. represented Pacific Coast Feather.

The building was originally planned as two separate buildings of less than 200,000 feet apiece before Pacific Feather’s large requirement came along. The build-to-suit is in phase two of the 856,000-square-foot Pico Rivera Business Center.

Phase one is slated to be complete by June 1 and consists of three buildings encompassing more than 500,000 square feet. Brokers are negotiating on one of those buildings, while the other two are still available, said Tomaselli of Voit, Majestic’s marketing partner.

Northrop’s plant once employed 12,000 people, but is shutting down later this year. Northrop sold the south 43 acres of its 200-acre site to Majestic, which was going to be the master developer for the entire property. But that now looks to be up in the air.

Majestic has been working on a deal to acquire the remaining 158 acres, and to resell about 55 acres to Vestar Development Co. for retail development. On the remaining land, Majestic would develop 2 million square feet of industrial space.

But Northrop is soliciting bids from other interested potential buyers besides Majestic.

“It is on the market. We’ve not signed any sales agreement,” said Jim Hart, spokesman for Northrop. He said the company has been talking to Majestic “and other prospective buyers.”

A Majestic executive, meanwhile, said he thought the parties “had an agreement” and the plan is to close escrow in October.

“We continue to try to finish up good-faith negotiations,” said Brook Morris, an executive vice president at Majestic.

Jeff Axtell, project manager with Vestar, said he’d like to see Majestic develop the rest of the property, but regardless of who buys the balance, Vestar will do the retail portion. The city wants Vestar, which developed centers in Cerritos and Long Beach, to develop a new town center that would “give the residents of Pico Rivera something they’re missing,” he said. It would also help replace the $2 million in annual business taxes that had been generated by the aerospace giant.

“The city, Majestic and we are excited to get going on the balance,” Axtell said.

Musical Chairs

More real estate pros have gotten itchy feet lately. Three significant job hops were announced last week David Thurman’s move to Grubb & Ellis Co., Gary Toeller’s move to Opus West and Michael Pepper’s move to Pacific Coast Capital Partners.

Effective today, Thurman will be a senior vice president in Grubb’s West L.A. office, specializing in investment sales and leasing. The move comes about 15 months after Thurman left Westmac Commercial Brokerage Co. and set up his own firm, Concorde Real Estate Partners, to concentrate more on investment sales.

Concorde will be dissolved with Thurman’s move to Grubb. He said the small shop limited how much service he could provide to clients.

“Clients today are very demanding and require a certain level of service,” Thurman said. “I had to pass on certain assignments because I couldn’t service them.” As a major brokerage, Grubb has the resources, technology and a larger team to service those requirements.

“I’ll be able to leverage off the relationships I’ve had with bigger landlords and owners of property,” Thurman said.

Meanwhile, Opus West’s hiring of Toeller signals the development company’s push to expand its presence in L.A., where it will open a regional office. The Phoenix-based company opened its only other Southern California office in Irvine in 1996.

Toeller is a former partner and senior vice president at Koll Development Co., who will now be vice president of development for Opus West’s L.A. region. The 20-year veteran of L.A. commercial real estate will spearhead new business development efforts in L.A. and Ventura counties for the office, industrial and retail sectors. Currently, Opus West is developing a 125,000-square-foot build-to-suit for Allstate Insurance Co. in the Gateway Corporate Center in Diamond Bar. It is also in the planning stages on a proposed 400,000-square-foot office building in Glendale, the second phase of the City Center project on North Brand Boulevard.

Finally, at the beginning of May, Pepper will be leaving AEW Capital Management in downtown L.A. after four years to join El Segundo-based Pacific Coast Capital, where he will head up the newly formed asset management division.

The real estate investment firm has accum-ulated $750 million in assets in only two years.

“After a certain point, they need somebody who does that all the time,” Pepper said. Pacific Coast goes after under-performing assets, development deals and opportunities lurking under the radar screen of pension funds and other major institutional players. Among its development projects is a 2 million-square-foot class-A industrial center project in San Pedro.

Pepper was AEW’s asset manager for the Western United States. Before that he worked at First Interstate and Glendale Federal banks.

Beach Real Estate, Anyone?

Pacifica Capital Group is selling three office properties in coastal cities, with an asking price of $114.1 million.

The “Life is a Beach Portfolio” encompasses Sunset Coast Plaza, across the street from Gladstone’s 4 Fish in Pacific Palisades; Pacifica Square in Marina del Rey; and the Manhattan Beach Office Plaza. The 600,000-square-foot portfolio is being marketed by Kevin Shannon of Grubb & Ellis, in conjunction with Pacifica’s in-house brokerage Leonard & Ohren.

“They have great ocean views and most can’t be duplicated. They’re being offered substantially below replacement (cost),” Shannon said.

Elizabeth Hayes can be reached at (323) 549-5225, ext. 229, or at ehayes@labusinessjournal.com

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