INTERCONTINENTAL ACQUIRES LARGE CREATIVE OFFICE CAMPUS IN DYNAMIC EL SEGUNDO MARKET OF SILICON BEACH
EL SEGUNDO, Calif. (May 9, 2016) – Intercontinental Real Estate Corporation (“Intercontinental”), a national real estate investment, development, and management firm headquartered in Boston, Massachusetts, has acquired the Apollo at Rosecrans, a recently renovated four-building creative office campus totaling 546,833 square feet of office space set on more than 13 acres in El Segundo, California. CBRE and Kevin Shannon of Newmark Grubb Knight Frank represented the sellers, Invesco Real Estate and Second Street Ventures in the transaction. The purchase price was not disclosed.
“The Apollo is a one-of-a-kind property. We were able to source and purchase a rare gem that is the definition of the most desired office product in the Silicon Beach area of the Los Angeles market,” says Jessica Levin, Director of Acquisitions at Intercontinental. “In addition, the asset’s location in a dense geography that provides walkability to surrounding restaurants, stores, transportation and housing options makes this precisely the environment today’s tech and creative company owners and employees are seeking.”
Following its high-end renovation, which was completed in 2015, the property has demonstrated its appeal with a remarkable 537,548 square feet already leased, bringing the asset to 98 percent occupancy in just 18 months, according to Levin.
The Apollo is situated along the Rosecrans Corridor, which is a major hotspot for the growing tech and creative companies in LA.
Levin notes that the Apollo at Rosecrans is also poised for strong rent growth based on favorable market fundamentals, including positive net absorption and the lowest vacancy rates that the El Segundo office market has seen in years.
“Demand for creative office space in Westside LA is on the rise,” explains Levin. “Continuing rent hikes in neighboring markets such as Playa Vista is driving tenants to El Segundo, resulting in a vast migration of businesses to the Rosecrans Corridor. This bodes extremely well for future rent appreciation in this submarket.”
“Despite its unparalleled location and creative appeal, rents at The Apollo are considerably below market rate values based on comparable product in the surrounding areas,” Levin adds, noting that while the property commands the highest rents in the Rosecrans Corridor, the Apollo currently leases office space at a 20 percent discount to average Silicon Beach rates.
Intercontinental plans to drive rent growth through a proactive leasing management platform, leveraging the asset’s amenities and innovative design to grow current tenants and attract additional tenants.
In addition to high-end creative office finishes in the buildings themselves such as polished concrete floors, African Mahogany accent panels, and LED strip accent lights, onsite amenities include a basketball court, dog park, biking and walking trails, shower facilities, an outdoor fire place, and a parking structure.
“The acquisition of Apollo perfectly aligns with our ongoing strategy of targeting well-located assets with long-term potential for rent appreciation,” affirms Levin. “The property’s irreplaceable location, coupled with its cutting-edge design tailored to meet the growing demand for creative space will deliver strong, risk-adjusted returns to our investors.”
The Apollo at Rosecrans is located at 2150 Park Place, 2120 Park Place, 2121 Park Place and 2175 Park Place in El Segundo, near the I-105 and the 110 Freeways.
Intercontinental Real Estate Corporation
Intercontinental Real Estate Corporation is an SEC registered investment adviser with decades-long experience in real estate investment, finance, development, construction management and asset management. Since 1959, Intercontinental has managed, developed, and owned over $10 billion in real estate property. Today, Intercontinental manages a portfolio in excess of $6 billion for its clients. The Intercontinental portfolio is diversified both by robust property mix and by geography. Fund strategies actively seek opportunities to invest in both core and core plus, as well as value-add development projects. Additional information is available at www.intercontinental.net.