Japanese company in advanced talks to buy Google’s Spruce Goose hangar for $300M-plus: sources
The future centerpiece of Google’s Southern California campus, the “Spruce Goose” airplane hangar in Playa Vista, is set to fall into Japanese hands.
Downtown Los Angeles-based Ratkovich Company is in advanced talks to sell the site for a price in the ballpark of $310 million to $320 million, The Real Deal has learned. The prospective buyer is a Japan-based finance and insurance company, sources said, but TRD could not immediately verify the firm’s name.
If it sells for $320 million, the deal for the roughly 358,000-square-foot property would pencil out to about $890 per square foot. It includes the existing 251,674-square-foot hangar and the three other buildings that surround it.
Ratkovich paid $32.4 million in 2010 for the hangar and 10 other buildings. It has been shopping the four-building complex at 12475 West Bluff Creek Drive, known as the Hercules Campus West, since October. A representative of the firm did not immediately respond to questions about the pending sale.
HFF’s John Crump, Doug Bond, Andrew Harper, Ryan Gallagher, Michael Leggett, and Mark West are the listing brokers, according to marketing materials from October seen by TRD. Some of them could not be reached, while others declined to comment.
The deal would be the latest in a flurry of sales in the neighborhood that have clocked in over $800 per square foot. In July, Vantage Property Investors sold Playa Jefferson — the 200,000-square-foot creative office campus that’s home to Facebook’s largest L.A. office — to Rockwood Capital for $165 million, or $843 per square foot. In July, New York developer Edward Minskoff went into contract to buy Bluffs at Playa Vista for roughly $425 million, or roughly $840 per square foot, as TRD reported.
The four buildings comprising Hercules Campus West are the oldest wooden laminate structures in the U.S. They are all fully leased to Google for 16 years, with three five-year extension options, according to the marketing materials. The technology giant has the option to purchase the property when the lease ends.
Google’s rent is 50 percent below market rate. Its base rent is approximately $11 million a year, according to the offering memo, which equates to just $1.75 per square foot per month. That rate will increase by 3 percent annually.
However, Google is hardly scrimping. The company has plans to invest approximately $250 million to improve the four buildings including the hangar, which was built in 1943. It will build a three-story structure with a mezzanine inside the hangar that will expand its square footage, according to the memo.
In total, Google has approvals to expand the square footage of the hangar site to over 500,00 square feet, according to the memo.
Google also purchased approximately 12 acres of land directly north of the hangar from ASB and Lincoln Properties Company for $120 million in December 2014, though it has not yet commented on its plans to develop that site. It also has Frank Gehry-designed offices in Venice Beach.
The Spruce Goose hangar was formerly home to the Howard Hughes Corporation, which used the facility as an “innovation campus.”