Northrop Puts Headquarters Up for Sale
Northrop Corp. said Thursday that it is seeking a buyer for its Century City headquarters complex and will use the proceeds to reduce debt.
Real estate officials have reportedly put the combined value of the 19-story and 15-story buildings the big aerospace firm owns on Century Park East at $200 million.
Northrop’s 300-member corporate staff occupies seven floors in the taller of the two structures and rents out the rest. The company plans to lease back the seven floors after a sale, said company spokesman Tony Cantafio.
“In order to reduce our debt,” Cantafio said, “we are actively looking at the sale of non-operating assets, like the corporate offices.” Analysts say the company, best known recently for its development of the B-2 Stealth bomber, has about $1.2 billion worth of debt on its books.
Cantafio said there are no plans to sell any Southern California manufacturing facilities.
Aerospace industry analyst Lawrence Harris at the investment firm of Bateman Eichler, Hill Richards in Los Angeles valued Northrop’s real estate holdings at $1.2 billion. That is about $400 million more than the total value of the company’s outstanding shares. The stock closed Thursday at $18.25, up 75 cents, in New York Stock Exchange trading.
Similar conditions have resulted in hostile corporate takeovers where companies are raided for their valuable real estate holdings. But Harris says that is unlikely in Northrop’s case, since 30% of the company’s stock is held by insiders and employees.
Northrop is the second aerospace company to try to cash in on real estate recently as prospects for defense work have dimmed. Last month, F-14 maker Grumman Corp. said it would redevelop nearly half of its 500-acre Long Island headquarters with a hotel, shopping center and offices.
