The Real Deal Los Angeles

Kansas City REIT nabs Hawthorne data center for $79.5M

Tel Aviv-based investment firm bought AT&T-leased property in 2002 for $43 million
By Katherine Clarke | October 11, 2016 08:30AM

 2301 W. 120th Street

2301 W. 120th Street

Red Sea Group, a Tel Aviv-based investment firm, has sold a Hawthorne data center for $79.5 million, or $276 per square foot, nearly double the $43 million it paid for it in 2002.

The former Northrop Grumman Corp. facility, at 2301 W. 120th Street, sold to Carter Validus Mission Critical REIT, a Kansas City-based non-traded real estate investment trust which invests in data centers and healthcare facilities, according to Real Capital Analytics.

The Israeli firm’s purchase of the 288,000-square-foot property 14 years ago marked its first foray into the Southern California real estate market.

The building dates back to 1963 and is leased by At&T.

Neither Red Sea nor Carter could be reached for comment.

The data center market has remained relatively stable in L.A. so far this year, with supply driven by companies such as CoreSite, Digital Realty and Equinix, according to commercial brokerage JLL. Demand remains relatively flat thanks to high power costs.