LA Office Development Gets Revamp As Huge Creative Office Space

A two-parcel office project in El Segundo that would bring just over 240K SF of new creative office space to the South Bay city is moving ahead, with plans to start construction before the end of the year. 

Updated details on the project, developed by Griffin Capital, came to light through environmental documents filed with the city of El Segundo. Urbanize was the first to spot the environmental report. 

Griffin Capital closed on the properties at the end of 2019, after two years of working on the transaction, according to a statement announcing the deal. 

The two properties sit at the northeast and southwest corners of the intersection of Kansas and Grand streets. Griffin Capital Managing Director of Development Bill Messori told Bisnow that the projects, because of their location, will act as a gateway to the Smoky Hollow area, a previously industrial area that El Segundo city officials have encouraged to grow into a creative office district through the Smoky Hollow specific plan. 

Both sites contain old industrial buildings that were previously used for semiconductor manufacturing and research. On the site on the northeast corner of the intersection, Griffin Capital will keep and repurpose one of the existing buildings, demolish two others and replace them with a new low-rise office building and parking, environmental documents show.

The project would create about 150K SF of new office space and parking for 474 cars.

On the southwest side of the intersection, Griffin Capital plans to raze the entire site and build a new three-story, roughly 93.5K SF office building and another parking structure with 384 parking spots.

The parking is one of a handful of additions to the project required by the city’s community benefits plan because the development as proposed would include structures taller and more dense than the specific plan allows for the area.

Other benefits include the provision of public Wi-Fi in communal spaces and areas of the project open to the public and the addition of a public café to the development, according to environmental filings. 

The project will have many of the amenities that have become synonymous with desirable, creative office spaces: operable windows, stairways so that elevators aren’t the only way to move vertically through the space, large private terraces and a rooftop deck. A three-firm team of Ware Malcomb, EYRC Architects and LRM are designing the project. 

With so much speculation about what office needs will look like in the near and long term, it might seem like an unusual time to build so much new space.

Office vacancy in El Segundo in Q1 of this year was 18.7%, just a bit higher than Q4 2020's 16.8% vacancy rate, according to a Q1 2021 report from Avison Young. But El Segundo also has a considerable number of more traditional high-rises and Messori sees the Catalyst project as the opposite of that.

Messori said he sees a parallel between the Catalyst project and Hackman Capital’s 888 Douglas — another former industrial complex in El Segundo that was remade into Class-A creative office space. The development has seen two major tenants ink leases there this year, Beyond Meat and L'Oreal USA. Beyond Meat's lease was for 281K SF. 

“Tenants will want to gravitate toward our project and move away from the traditional office building,” Messori said. 

Passed in 2018, the Smoky Hollow specific plan allows for increased density across the area, which measures about 120 acres, with the goal of creating a walkable, bike-friendly environment that includes public art and landscaping, El Segundo Mayor Drew Boyles said via email.

“El Segundo’s Smoky Hollow continues to provide fantastic real estate opportunities,” Boyles said, and is “already home to a mix of industries, including aerospace and technology startups, advertising agencies, architects, [and] music and film production.” 

Boyles added that while the city is "enthusiastic about the project, we’re listening to our residents and businesses concerns, and doing our best to incorporate their feedback."

Griffin had previously announced that it expected to start construction on the project in October 2020 with a projected construction completion of May 2022. The plan now is to have construction begin later this year and wrap by around mid-2023.