Steven Yazdani, the Lucent Capital managing director, tells GlobeSt.com that his firm started marketing the sale of the campus to a handful of buyers prior to the Rhythm & Hues bankruptcy filing. Yazdani says they received “several excellent offers and went under contract” prior to the bankruptcy. He termed the deal “complex, time-sensitive and particularly challenging.”

The property's new owners plan to invest up to $20 million to redevelop the six-acre sit into a creative office campus. Planned improvements include new interactive outdoor common areas, additional parking and new tenant spaces with floor to ceiling heights.

“For more than 30 years, this property has been flying below the radar—100% occupied by various owner/occupiers and quietly operating within the marketplace,” said a statement from John MacDonald, VP of acquisitions for Rockwood Capital. “We will re-introduce the complex to the market with a fresh and relevant new look and feel.”

Paul Marshall, president of Marshall Property & Development, said in a statement that the campus “provides a unique value-added investment opportunity centrally located in the South Bay/West L.A. markets. The existing architecture and unique campus setting provides us wit a great opportunity to create what today's tenants are looking for – indoor and outdoor gathering areas which allow tenants to interact in a creative environment.”

According to South Bay market report from Colliers International, the South Bay office market began 2013 with negative absorption compared to the positive absorption seen in Q4 2012. Net absorption was -358,500 square feet, which brought the vacancy rate up to 21.1%. This was a 110 basis point increase from a revised total vacancy of 20.0% at year end 2012.

The South Bay office market saw large space givebacks from both Northrop Grumman and Raytheon. With both companies vacating a total of nearly 448,000 square feet in El Segundo, total vacancy in the South Bay increased to the highest that has been reported since 2004.