EL SEGUNDO, CA-Tishman Speyer has recapitalized its two Continental Grand Plaza office buildings here. The debt on the properties—which were separately acquired and financed in 2006—has been restructured with new equity invested in each property and with sufficient capital available to fund new leases and otherwise meet future financial obligations.
Continental Grand Plaza is comprised of two six-story office buildings, each totaling approximately 238,000 rentable square feet along with an adjacent garage. The recapitalization of Continental Grand Plaza I followed a recent restructuring of the largest tenant’s lease, due to that company’s bankruptcy. Tishman Speyer then paid off the mezzanine loan at a discount. Continental Grand Plaza I was completed in 1986.
In the case of Continental Grand Plaza II, which Tishman Speyer acquired from MetLife Real Estate Investments for $82 million, the firm successfully negotiated an extension of term with the senior loan’s special servicer and restructured the mezzanine debt as well. Continental Grand Plaza II was completed in 1999.
“We believe that the El Segundo office market’s long-term outlook justifies additional investment in Continental Grand Plaza,” says Tishman Speyer senior managing director John Miller. “We’re pleased that our lenders were sufficiently flexible to enable us to recapitalize and that we can now continue to execute our strategies for each of the assets.”
Although Tishman tells GlobeSt.com that it cannot publicly release financial data, the recapitalization follows several other recent debt transactions by the New York City-based company. The company recently recapitalized its Dublin Corporate Center office campus in Dublin, CA by buying back all of the property’s debt at a discount and committed to new capital that would be used to fund future capital expenditures and leasing costs.
Other recent debt transactions recently completed by the firm include: recent large portfolio debt restructurings in Chicago and Washington, DC, and the restructuring of property debt for a downtown Seattle office tower.
As GlobeSt.com previously reported, in Seattle, the company reached an agreement to restructure the $175-million debt secured by Second & Seneca, a downtown Seattle office building. Under the restructuring agreement, the ownership will invest fresh capital, which is expected to put the property on a firm financial footing into 2017 when the current debt matures. As GlobeSt.com also previously reported, the firm invested $700 million to retire $600 million of partnership debt and provide working capital for a 28-asset portfolio in the Washington, DC area. The company also recently restructured a $1.4-billion loan for five downtown Chicago office towers, as GlobeSt.com also previously reported. The firm also recently regained control of prime commercial development land in Playa Vista.
Tishman Speyer also revealed that TASC Inc. has signed a five-year 42,000-square-foot lease at Continental Grand Plaza II. TASC provides advanced systems engineering, integration and decision-support systems to the US intelligence community, the Department of Defense and various civilian federal agencies. John Ollen and Jake Mota represented property ownership. Miller says that the firm is “pleased to welcome TASC to the property and look forward to serving the company’s office needs.”
The assets are prominently located in El Segundo and together are generally considered to be the premiere class A mid-rise office property in the “Superblock area” of El Segundo. Located at the confluence of two major freeways and adjacent to Los Angeles International Airport, the property offers immediate access to highly affluent residential communities in Manhattan Beach, Hermosa Beach, Marina Del Rey and the Palos Verdes Peninsula.
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Natalie Dolce
Natalie Dolce, editor-in-chief of GlobeSt.com and GlobeSt. Real Estate Forum, is responsible for working with editorial staff, freelancers and senior management to help plan the overarching vision that encompasses GlobeSt.com, including short-term and long-term goals for the website, how content integrates through the company’s other product lines and the overall quality of content. Previously she served as national executive editor and editor of the West Coast region for GlobeSt.com and Real Estate Forum, and was responsible for coverage of news and information pertaining to that vital real estate region. Prior to moving out to the Southern California office, she was Northeast bureau chief, covering New York City for GlobeSt.com. Her background includes a stint at InStyle Magazine, and as managing editor with New York Press, an alternative weekly New York City paper. In her career, she has also covered a variety of beats for M magazine, Arthur Frommer's Budget Travel, FashionLedge.com, and Co-Ed magazine. Dolce has also freelanced for a number of publications, including MSNBC.com and Museums New York magazine.
