Minskoff takes haircut on 500K sf Silicon Beach office campus

Edward Minskoff has taken a trim on a 500,000-square foot office campus in Playa Vista.

Lincoln Property and Strategic Value Partners bought his Bluffs campus at 12121 and 12181 Bluff Creek Drive for $187.5 million — eight years after Minskoff’s EJM Equities paid $413 million, or $826 per square foot, then defaulted on hundreds of millions in loans, the Commercial Observer reported.

The deal works out to $375 per square foot. Tenants include Google and Fox Interactive Media.

The occupancy rate and tenant roster at the time of sale were unavailable. In the second quarter of last year, Google put 98,000 square feet of offices at The Bluffs on the sublease market.

In 2016, New York-based Edward J. Minskoff Equities placed a big bet on L.A.’s Silicon Beach, the tech-centered region south of Santa Monica, with the campus buy, The Real Deal reported.

Local industry insiders had called it a risky acquisition. Unidentified sources had been surprised that the two-building office complex, nestled in 15 acres, could fetch $826 a square foot.

The Bluffs at Playa Vista was developed by Lincoln Property, who sold it to JPMorgan in 2011 for $294 million, or $587 a square foot. Five years later, the New York bank traded it to Minskoff.

In July, however, Edward J. Minskoff Equities defaulted on The Bluffs office complex, owing $271 million in unpaid debt, according to The Real Deal.

“The Bluffs is a great property and there are no plans to hand the keys back,” Minskoff declared in an email last October, adding the loan was performing at the time. He didn’t respond to a request for comment regarding the notice of default from lender Morgan Stanley.

Hand the keys back he did, however.

And Dallas-based Lincoln Property, with help from Connecticut-based Strategic Value Partners, bought back its creative offices at Playa Vista. They paid $187.5 million, an unidentified source familiar with the deal told the Observer.

The property includes a fitness center, three restaurants and a property management team provided by Lincoln. The new owners plan to renovate the outdoor courtyard and buildings’ lobbies.

The Bluffs campus played a leading role in drawing the 500 tech and media companies that came to make up Silicon Beach, on L.A.’s Westside. It’s next door to Google’s converted “Spruce Goose” hangar, which sits next to the 9-acre Campus Central Park, and three blocks from the 220,000-square-foot Runway Playa Vista shopping center.

Since the pandemic, however, many companies have been shrinking their leases or vacating the Silicon Beach submarket, according to the Observer.

Earlier this year, Facebook put up for sublease 130,000 square feet at Tishman Speyer’s Brickyard campus. Other companies like Google, Amazon.com, Microsoft and Snap have been downsizing their office requirements on L.A.’s Westside as they trim workers.

— Dana Bartholomew