Bay Club Company Buys El Segundo, Calif., Property for $46M

Bay Club Company, which owns more than 35 recreation and lifestyle clubs on the West Coast, is expanding its real estate portfolio in Greater Los Angeles.

Bay Club announced it put down $42 million to acquire a 5.4-acre campus that is home to Bay Club El Segundo, completing a nearly decade-old strategy with the seller, Continental Development Corporation (CDC), and further establishing the South Bay area  as an athletic and rec club destination.

Bay Club El Segundo sits at 2250 Park Place within the 2.7 million-square-foot Continental Park, a master-planned business center that spans 100 acres. The club has more than 8,000 members and features fitness programming and training, aquatics, basketball, physical recovery and family programming

Bay Club entered the L.A. market in 2015 when it acquired Spectrum Athletic Clubs, and Continental took a minority stake in Bay Club’s operating business. In 2017, Bay Club acquired the 100,000-square-foot building at 2250 Park Place from CDC for $29 million, along with a long-term ground lease and the option to complete the full transaction.

The company exercised the option, and now holds ownership of both the buildings and the underlying land associated with the property.

“We structured this deal almost 10 years ago with CDC with the intention of one day owning the land beneath it,” Matthew Stevens, president and CEO of Bay Club, said in a statement. “[Completing that strategy] gives us permanent control over our future here and the foundation to keep investing in this club and this community for years to come. One of Bay Club’s foundational beliefs is that if you control the real estate, you control your future.”

Bay Club’s total investment in the Rosecrans-Sepulveda corridor now exceeds $200 million. Deals include the 2017 acquisition and the ongoing $25 million renovation of the nearby Manhattan Country Club, a $20 million renovation of Bay Club El Segundo in 2019, and the acquisition of Griffin Club on L.A.’s Westside in 2025. Bay Club said it has more than 25,000 members in Greater L.A.

The company’s broader portfolio includes locations from Seattle to San Diego, serving more than 150,000 members across the West Coast with approximately $1 billion in real estate. Bay Club also has more than 300 employees in its equity program.

Kristin Macdonald of law firm Brownstein Hyatt Farber Schreck advised Bay Club on the transaction.

Gregory Cornfield can be reached at gcornfield@commercialobserver.com.