UPDATED, Dec. 7, 2021, 12:25 p.m.: The headquarters of Amazon’s home security arm Ring in Hawthorne has sold for around $65 million — more than $1,000 per square foot, The Real Deal has learned.
It’s a high-water mark for the local office market lately. It matches a top price in Los Angeles County for the third quarter, which was Excelsior Partners’ sale a 52,000-square-foot office property in next-door El Segundo for $52 million.
Los Angeles-based IDS Real Estate bought the 62,000-square-foot office property at 12515 Cerise Avenue, which was built by developer Zach Vella, according to CBRE’s Kevin Foley, who brokered the deal.
Amazon’s Ring signed a 10-year lease on the property in March, with two five-year extension options.
Completed this year, the office property includes an on-site restaurant and a seven-level parking structure with 588 spaces. Vella, who is CEO of Vella Group and has developed properties in Miami and New York, paid $13 million for the land at 12515 Cerise in Hawthorne in 2018.
Vella Group obtained $42 million in construction financing from Pacific Western Bank and M&T Bank and landed another $45 million loan on the property from Rialto Capital Management in 2020.
Vella then put the property up for sale in August.
The deal is a shining star amid a lagging office market during the pandemic, as many companies have yet to move employees back into the work place full time. Less attractive Class B and C office properties are getting demolished across Southern California to make room for newer industrial properties.
“The reason [the property] was so attractive was because it has Amazon credit,” Foley told TRD. “Everyone is looking for a single-tenant with really good credit and terms.”
Vella told TRD the deal shows the strength of the Hawthorne market–south of Los Angeles International Airport and north of region’s twin seaports “combined with the strength of the tenant.”
“We look forward to developing the land we have and other conversion properties in Los Angeles,” Vella said, adding his firm has developments in the pipeline, including a 450,000-square-foot office campus in El Segundo.
This story previously noted Hyundai’s purchase of an office property in El Segundo was the highest price-per-square-foot across Los Angeles County in third quarter. This has been corrected to note Excelsior Partners’ sale.