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5/21/21
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San Francisco-based SteelWave acquired The Switchyard, a 150.5k sf, Class A, creative office campus located in Los Angeles’ Arts District in a recent $80 mil ($532/sf) transaction. It was sold by CEG Construction.
The modern, two-building property was developed in two phases over the past decade. The buildings were vacant at the time of sale.
The Switchyard consists of adjacent, low-rise office buildings centrally located at 500 and 540 S. Santa Fe Ave, near the Los Angeles River and 4th Street bridge. Constructed in 2019, the 500 property consists of a newly constructed creative office building totaling approx 100k sf over five floors, which includes ground floor retail. The building also features a unique penthouse with an open deck area. The 540 property consists of a two-story office building totaling 50.9k sf that was built in 2012. Both buildings feature secured parking and gated and secured entry.
SteelWave intends to institute a well-conceived capital program that will elevate the building’s exterior by using different paint schemes and mural applications. Additionally, SteelWave will make transformative improvements to on-site amenities including outdoor seating, enhanced landscaping, upgraded lobbies and thoughtful signage and branding.
Mike Condon Jr., Steve Marcussen, Erica Finck and Bailey Dawson with Cushman & Wakefield represented both parties in the investment transaction. The firm’s Pete Collins, Brittany Winn, Scott Menkus, and Alexa Delahooke also provided market leasing advisory, while Rob Rubano, Brian Share, Joseph Lieske, Ernesto Sanchez, Keith Padien, and Greg Napper assisted the buyer with financing.
“The headlines for the past year for the future of office have been somewhat bleak, but the sale of The Switchyard is a pivotal moment for enthusiasm and a sign that the recovery is in fact here, as evidenced by the amount of institutional investor interest in the portfolio. This closing dispels many of the unfounded fears that office investment would not return at the quickened pace we are seeing,” commented Condon Jr.
Added Marcussen, “This is a best-in-class campus that may present a tenant with a unique opportunity to create a custom headquarters campus in the famed Arts District, and that provides quick access to a centralized freeway network, walkability to notable dining and entertainment amenities, and in an increasingly popular area with a rapidly changing tenant landscape including fashion, media and entertainment, and tech that continues to transform the surrounding neighborhood into a true live/work/play community. The Switchyard is a huge project for the area.”
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