SSV, Invesco Pocket a Bundle on South Bay Office Sale
- May 23, 2016
Los Angeles—Veni, vidi, vici. SSV Properties and Invesco Real Estate came to metropolitan Los Angeles’ South Bay area, saw an opportunity, and conquered the local creative office market. Three years after acquiring Apollo at Rosecrans in El Segundo, the joint venture partners have sold the 545,000-square-foot, Class A property to Intercontinental Real Estate Corp. for more than $300 million. The deal is being called one of the highest per square-foot office trades ever in the South Bay area.
It was in 2013 when SSV and Invesco acquired Apollo at Rosecrans, then mostly vacant and known as Park Place, for just $57.4 million. Three years and one major repositioning later, the partners determined it was time to let go. “There was no reason not to sell,” David Jordon, president, SSV, told Commercial Property Executive. “The project reached lease stabilization and finished construction, and our objective was always to exit the asset. It was never a long-term hold. This was a very good time to sell—it’s a very strong capital market.” Commercial real estate services firms CBRE Group and Newmark Grubb Knight Frank represented the partners in the disposition.
After snapping up the asset from developer Continental Development Corp., SSV and Invesco wasted precious little time transforming the property into a creative office campus, shelling out more than $75 million on renovations. Today, the four-building Apollo at Rosecrans, which carries the addresses of 2150, 2120, 2121 and 2175 Park Place, is 98 percent leased and boasts the likes of DaVita HealthCare Partners Inc.’s as a lead tenant. The healthcare company inked a 10-year lease for 185,000 square feet in 2015 in a deal valued at $115 million.
It has the tenancy, and it has quite the reputation. “Apollo at Rosecrans has become the premier creative office campus in the South Bay market,” Jordon said. “It’s established and recognized, and the sale price reflects that. So we were successful in creating what we intended to create.”
The word “creative” is not used loosely in describing Apollo at Rosecrans. The office complex features a host of amenities that tech and creative companies covet, including bike rentals; a dog park; an outdoor fireplace; a 20-minute walking loop; food truck space; and, of course, campus-wide Wi-Fi. But it’s not just Apollo at Rosecrans that is a major magnet. For the would-be Silicon Beach office users, South Bay is fast becoming the place to be.
“South Bay is in the process of transitioning to a much more diverse and dynamic market,” added Jordon. “It had been largely an aerospace sector for decades, but now the tenants are more reflective of tenants you see on the West Side. The whole South Bay market has changed and now you’re seeing demand from quality tenants that want to be in that location.”