SteelWave pays $64M for empty El Segundo office

Three-story, 152K sf building will be delivered vacant

Nov.November 27, 2019 03:05 PM
From left: SteelWave CEO Barry DiRaimondo and Griffin Capital CEO Kevin A. Shields
From left: SteelWave CEO Barry DiRaimondo and Griffin Capital CEO Kevin A. Shields

SteelWave just scooped up an empty three-story office building in El Segundo for $63.5 million, adding to its growing portfolio in the Los Angeles area.

The San Mateo-based firm bought the 152,000-square-foot property, located at 2160 Grand Ave., from Griffin Capital Essential REIT Inc., according to brokers on the deal.

Griffin Capital acquired the building for $52.7 million in February 2014, and sold it to SteelWave without any leases on the books. Griffin Capital bought out the sole tenant’s lease prior to the sale, the REIT said in a note to investors this week.

The 6.4-acre property, built in 1999, traded for about $420 a square foot.

Steelwave is likely to opt for a reposition play, potentially targeting creative tenants to fill the Class-A property, said brokers for Newmark Knight Frank, which handled elements of the sale.

An NKF team featuring Kevin Shannon, Ken White, Rob Hannan, Laura Stumm and Michael Moll represented Griffin Capital in the deal. SteelWave did not use outside brokers.

SteelWave, headed by Barry DiRaimondo and Paul Meyer, is known for value-add office investments in the Los Angeles area, where it has about a half-dozen office properties. Among its holdings are One World Trade Center in Long Beach and Marina Park in Marina Del Rey.

Last year, the real estate company sold an office campus in El Segundo to Atlas Capital Group for $39 million. SteelWave and Goldman Sachs had acquired the property, a former Raytheon research facility, in 2016, and undertook an extensive renovation of the property before selling.

El Segundo was once a hub for the satellite and military industry, but in recent years startups have moved there as a lower-cost alternative to Silicon Beach markets like Venice and Playa Vista.

El Segundo continues to be at the center of activity for developers seeking to turn office buildings into creative spaces for the thriving tech and startup firms in the area.

Earlier this month, Continental Development Corp. landed a $55 million refinance on four mixed-use buildings inside its massive retail and office park in El Segundo.

In early 2016, Continental Development began redeveloping several of its properties in Continental Park, turning them into creative office spaces.

In September, GPI Cos. acquired an El Segundo manufacturing complex leased by toymaker Mattel, for $84 million at 2031 E. Mariposa Avenue.

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