Israeli Company Buys Data Center in Hawthorne

An Israeli real estate firm has purchased a 288,000-square-foot Hawthorne data center leased to AT&T; Corp. The sale marks the first Southern California investment for Red Sea Group, whose U.S. operations are based in Dallas.

Red Sea is believed to have paid more than $43 million for the former Northrop Grumman Corp. facility built in 1963 at 2301 W. 120th St. Tel Aviv-based Red Sea purchased the property from Seattle’s Sabey Corp., which bought the facility after Northrop vacated the premises and subsequently negotiated a 15-year lease with AT&T.;

The data center, or Web-hosting real estate category, was very active until the telecom sector began hitting the skids two years ago. But Red Sea Vice President Mitch Kralis said his firm was attracted to the Hawthorne facility’s long-term lease with a corporate giant and believes the area is “up-and-coming.”

Mortgage banker L.J. Melody & Co. helped Red Sea secure acquisition financing from Royal Insurance Co. Patrick Pendergast of Washington Partners brokered the property sale.

Kralis said Red Sea wants to buy additional income-producing real estate in Southern California and has the capital to close transactions quickly.

Meanwhile, Red Sea has engaged an agent to sell its Bourbon Street Hotel & Casino in Las Vegas.