Though Lowe Enterprises won't identify its client, local brokerage sources tell GlobeSt.com that the buyer is the Pennsylvania State Employees' Retirement System. Known as Grand Avenue Courtyard, the 12-story building stands at 1960 E. Grand Ave. in El Segundo.
The building is about 95% leased to tenants that include Saatchi & Saatchi's Team One Advertising group, computer chipmaker Intel Corp. and financial services giant Charles Schwab & Co. The acquisition team was led by Rick Newman, SVP of Lowe Enterprises' Commercial Group.
Newman tells GlobeSt.com that Lowe's Commercial Group will also help the pension fund build three- or four-story, 90,000-sf office building on the adjoining parcel. "We will begin marketing to build-to-suit tenants or tenants who would prelease a portion of the development in the first quarter of next year, and we hope to break ground by next fall," Newman says.
The property is in the so-called Superblock area of El Segundo, where several office towers and campuses have sprung up over the past few years.
Sales and leasing activity in El Segundo and the rest of the South Bay have been brisk, in part because it's much less expensive than the pricey Westside market farther north. It also has more open space on which to build and easy access to several freeways, Los Angeles International Airport and the twin ports of Los Angeles and Long Beach.
The seller was HMS Office, a joint venture of Hines Interests and Morgan Stanley Group. HMS Office was represented by the LA office of Eastdil Realty. Newman led negotiations for Lowe and its pension fund client.
The South Bay's rising rents and property values have also prompted more brokerage firms to target the area for expansion. Yesterday, GlobeSt.com reported that New York-based real estate giant Cushman & Wakefield has acquired Long Beach-based Matlow-Kennedy Commercial Real Estate Services, a 16-broker outfit with a large South Bay presence.
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