The former Los Angeles headquarters of Continental Airlines and most recently a Northrop Grumman office building in El Segundo has sold for $138.5M.
Boston-based TA Realty has acquired the Continental Plaza, a 15-story, 340K SF office tower at 101 Continental Blvd. from VEREIT.
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Newmark Knight Frank's Kevin Shannon, Ken White, Rob Hannan, Laura Stumm and Michael Moll represented the seller. TA Realty represented itself.
NKF said VEREIT, which had purchased the property for $98M in 2014, approached the firm to market the building as a redevelopment opportunity after the tenant, Northrop Grumman, decided to vacate the building.
“Based on the strength of the El Segundo office market and the quality of the building, we were able to achieve over $400 per SF sale price," VEREIT Chief Investment Officer Thomas W. Roberts said in a news release. "Disposing of this property decreased office exposure and strengthened VEREIT’s portfolio.”
Continental Airlines developed Continental Plaza in 1972. The property served as one of its office spaces in Los Angeles during the 1970s before the company was acquired by Texas Air Corp. Continental remained in the building until 1983.
Renovated in 2008, the building features floor-to-ceiling glass on every level and a view of the ocean from Palos Verdes to Santa Monica.
NKF officials said Northrop Grumman is slated to vacate the building upon its lease expiration in May.
The buyer is planning a comprehensive building renovation, brokers said.
“The strong response to this offering from capital validates El Segundo as a target Westside office market," Hannan said in a news release. "The appetite for this deal was deep with domestic institutional capital, REITs, and foreign buyers competing.”
Stumm said this was a prime opportunity to acquire a rare vacant Westside office asset. She said TA Realty’s repositioning of 101 Continental would provide much-needed creative inventory in a quickly tightening Class-A El Segundo office market.
"While El Segundo has experienced a 50% increase in rental rates over the past five years, it still trails the rate increases of neighboring Culver City [68%] and Playa Vista [79%], indicating room for further rental rate growth.”
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