Tishman Speyer notches priciest LA office sale of year

Tishman Speyer has sold an office campus in El Segundo, marking the priciest office deal to close this year.

The New York-based firm sold a 260,000-square-foot creative office campus at 555 South Aviation Boulevard for $205.5 million, or about $790 per square foot, according to an announcement on Monday. Cushman & Wakefield represented Tishman in the deal.

An entity linked to FS Investments and Rialto Capital Management purchased the property, using a $126.7 million floating rate loan provided by Natixis, according to an announcement from the lender last week.

Tishman bought the property — then a single-story industrial and distribution complex leased by Xerox — for $45 million about seven years ago. Once Xerox vacated the building, Tishman spent a further $44 million to redevelop the property into office space, complete with a fitness center, cafe and outdoor areas.

Consumer tech firm Belkin International, ad agency Publicis and workout wear brand Fabletics now lease the property, with no vacancies, according to Tishman.

The deal is one of two major dispositions for Tishman over the last few weeks. The other was the firm’s $707 million sale of a 719,000-square-foot campus in Sunnyvale. That office campus is fully leased to Facebook parent Meta Platforms.

Few office campuses have sold across L.A. in recent months, and even fewer have traded at price points above $100 million, given high vacancy rates across office properties.

This year’s priciest deal was set to be Harbor Associates’ $165 million purchase of the Union Bank Plaza in Downtown L.A., though the firm backed out of the deal earlier this month.

El Segundo, which has attracted a number of manufacturing and technology firms over the last year, has slightly more positive vacancy numbers than other L.A. submarkets. In the first quarter, about 17 percent of office space was vacant in the city, compared to about 20 percent across the entire South Bay.