Plans Show El Segundo Rebounding
A mixed-use development expected to get the go-ahead from El Segundo’s City Council tonight illustrates how the city’s economic fortunes have rebounded over the last few years.
The 23-acre Grand Avenue Corporate Center project, proposed by a team headed by Morgan Stanley Real Estate Fund subsidiary Kearny Real Estate Co., is slated to include one of the biggest customized “build-to-suit” office building developments Southern California has seen in several years, as well as additional multi-tenant offices, two business-oriented hotels, and a hockey and basketball practice facility to be built by the owners of the Los Angeles Kings.
Should the project receive approval, construction on some of the low-rise structures would begin within a few months on undeveloped property along the west side of Nash Street between El Segundo Boulevard and Mariposa Street. When completed, the development could total about 1.1 million square feet of floor space, cost as much as $218 million and house as many as 4,000 employees, according to Kearny officials.
Jim Brooks, a Kearny division president, said the development team has negotiated a $35-million build-to-suit lease with data networking giant Infonet Services Corp. for a new 160,000-square-foot corporate headquarters building. Infonet would expand from its existing headquarters next to the Kearny property. Brooks said the developers expect to break ground in the fall on the Infonet headquarters, as well as on an additional 100,000 square feet of office space for future tenants.
The plans reflect a strong rebound in the El Segundo area’s economy over the last few years, as much of its employment base has converted from defense and aerospace activity to commercial high-tech operations, such as satellite communications systems, said Jeff Dritley, a Morgan Stanley managing director.
Office rents and occupancies have risen with the demand for space, prompting substantial investment in El Segundo commercial properties and several other proposed development projects.
As the developers pursued approvals for their plans over the last six months, they made a deal with Hilton Hotels Corp. in which Hilton would own and operate a 200-room Hilton Garden Inn. Kearny also is negotiating with two bidders interested in acquiring a 3.5-acre site slated for a 150-room extended-stay hotel, Brooks said.
