Lincoln Property, Rockwood Team Up on SoCal Office Project
- Nov 23, 2016
El Segundo, Calif.—Lincoln Property Co. and an affiliate of Rockwood Capital LLC have partnered together on the purchase and multi-million dollar repositioning of a 355,000-square-foot office and retail campus to creative offices in the region’s fast-growing “Silicon Beach” area.
The firms bought Gateway El Segundo, which has three three-story Class B office buildings and two single-story retail buildings, for a reported $120 million from DivcoWest. Lincoln Property and the Rockwood affiliate didn’t release the price, only saying they plan a “multi-million renovation” to create a top-tier creative campus by late 2017. DivcoWest had owned the property located in the heart of El Segundo’s commercial district at Sepulveda Boulevard and East Grand Avenue since April 2014, when it reportedly paid $75 million for it.
El Segundo, touted one of the “most business-friendly cities” by the Los Angeles County Economic Development Corp., has seen a surge in demand for creative office space by technology, media and entertainment companies as the region’s Silicon Beach expands beyond Santa Monica and Venice into communities like El Segundo.
“Gateway El Segundo provides an exciting opportunity to take advantage of the great Southern California weather and design both an indoor and outdoor space that is perfect for the needs of innovating technology and creative companies,” David Binswanger, Lincoln executive president, said in a prepared statement. “We see this as a chance to contribute to the phenomenal growth of the tech industry in Silicon Beach.”
The Gateway El Segundo repositioning will join more than 3 million square feet of redevelopment projects that have been completed or are underway in El Segundo, totaling more than $1 billion worth of development within two square miles, according to the new owners.
The office buildings are currently 52 percent leased so repositioning should provide good upside. The retail space is fully leaded to six fast casual and quick-service restaurant tenants.
Upgrades will include improving the central courtyard to create spaces for employees to work and meet; modernizing lobbies, restrooms and fitness center; and building suites for smaller creative tenants seeking move-in ready spaces. The property already has large floor plates, open space, ample parking and walkable amenities, which are all attractive to tech and creative industry tenants.
“El Segundo is transforming into a diversified market for leading-edge tech and new media companies,” Rob Kane, Lincoln senior vice president, said in prepared remarks. “We see Gateway El Segundo as a way to capitalize on this enormous growth and contribute to it by creating a dynamic, vibrant space to attract new job-creating tenants.”
In March, Lincoln and Rockwood partnered on another Los Angeles-area property – the acquisition of a 22-story office building at 915 Wilshire in downtown L.A. that it had previously sold in 2007. They also plan to give this property a makeover to appeal to creative tenants.
Last year, Lincoln bought another El Segundo office property, paying $51.6 million for the nearly 200,000-square-foot asset at 101 N. Sepulveda Blvd., according to the Los Angeles Business Journal.