L.A. Office Campus Sells for $375 a Square Foot as Silicon Beach Gets Cloudy
Strategic Value Partners and Lincoln Property Company paid $188 million for The Bluffs in Playa Vista, about eight years after the same property traded for $413 million
By Greg Cornfield October 28, 2024 8:00 pm
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An office campus in Los Angeles’ “Silicon Beach” has new owners after the previous landlord defaulted on about a quarter of a billion dollars in financing, showing the larger market challenges hitting what was recently the region’s up-and-coming tech and media hub.
Investment firm Strategic Value Partners and Lincoln Property Company have acquired The Bluffs, a 500,000-square-foot office campus in Playa Vista that has had Google (GOOGL) and Fox as tenants. The two firms put down $375 per square foot, or about $187.5 million, a source familiar with the deal told Commercial Observer.
Edward J. Minskoff Equities (EJME) acquired the campus for $413 million in October 2016, property records show. But EJME defaulted on a $250 million loan tied to the campus, and owed lender Morgan Stanley (MS) about $271 million earlier this summer. Minskoff did not immediately return a request for comment.
The current occupancy rate and tenant roster were not immediately available. In the second quarter of 2023, Google put 98,000 square feet of space at The Bluffs on the sublease market.
The property includes a fitness center, three restaurants and a property management team provided by Lincoln. The new owners want to renovate the outdoor courtyard and buildings’ lobbies.
The two-building creative office campus is at 12121 and 12181 Bluff Creek Drive in a submarket that played a leading role in hosting major tech and media companies as the “Silicon Beach” trend grew on L.A.’s Westside. It’s next door to Google’s facility in the converted “Spruce Goose” hangar, adjacent to the 9-acre Campus Central Park, and three blocks from the 220,000-square-foot retail complex Runway Playa Vista.
But, since the pandemic, many companies have been shrinking their leases or vacating the submarket entirely. Earlier this year, Facebook put up for sublease 130,000 square feet at Tishman Speyer’s Brickyard campus. Other companies like Google, Amazon, Microsoft and Snap have been reducing their office requirements on L.A.’s Westside, cutting their office-using employment by hundreds and thousands, or both.
Gregory Cornfield can be reached at gcornfield@commercialobserver.com.
