After seeking a new home for nearly two years, fast-growing computer "connectivity" specialist Candle Corp. has selected a former Rockwell International engineering building in El Segundo and plans to relocate there from its costly Santa Monica digs next June.
The privately held tech company founded and owned by technology pioneer Aubrey Chernick is "bursting at the seams" at its long-time headquarters in Santa Monica's Water Garden complex, said Candle representative Victoria Rierdan.
Candle will occupy the entire 335,000-square-foot, four-story North Douglas Street building where Rockwell engineers once worked on the B-1 bomber. A group including Chernick is buying the property--for a price estimated at just over $30 million--from Newport Beach-based investors who bought the vacant building a year ago and are completing a major interior and exterior overhaul, according to sources familiar with the pending sale. Rierdan would only say that Candle will lease the headquarters from a limited partnership acquiring the property. But she noted that further customized improvements, including a cafeteria and new security and fire/life-safety systems, will complete the conversion into a campus environment.
Some Candle employees in Agoura and Westlake Village will relocate to the new El Segundo home office, which will initially house about 800 but can accommodate continued expansion up to about 1,400 people. The company has been growing at about 20% annually, Rierdan said.
Candle engaged Cushman Realty Corp. to assist in the search for a new home as business started to take off about two years ago, Rierdan said.
Rierdan wouldn't disclose the rent Candle will pay, but said it amounts to a savings over its current location. While rents and values have jumped substantially among El Segundo's best commercial buildings since the last recession, office rents in the district surrounding the Water Garden have risen even more dramatically and are among the highest in the region.
Indeed, mid-year statistics from brokerage Grubb & Ellis Co. indicate that "asking" office rents in El Segundo average $1.72 per square foot monthly, compared with $2.75 in Santa Monica--tops in the L.A. Basin.
Steve Solomon, a broker at Seeley/Colliers, noted that rents at better El Segundo office buildings have jumped 30% to 40% over the last 18 months--and that Candle's commitment to the Douglas building will put additional pressure on those rates.
A new 160,000-square-foot headquarters for data networking giant Infonet Services Corp. will soon be under construction there as well. The large-scale commitments by Candle and Infonet illustrate El Segundo's ongoing conversion from defense and aerospace to non-defense technologies, as well as more traditional commercial enterprises, said Cushman & Wakefield Inc. broker Steve Silk. Along with partner Jay Borzi, Silk helped investment fund AEW/LBA Acquisition Co. II (a venture of Newport Beach's Layton-Belling & Associates and Boston's AEW Capital Management) buy the Douglas Street building from a Rockwell affiliate and sell it to its future owners.