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RREEF Buys El Segundo Building

The three-story office property primarily occupied by FedEx sells for $28.7 million.

May 05, 2003|Roger Vincent | Times Staff Writer

An affiliate of Fujita Corp. USA has sold a three-story office building in El Segundo, one of the Japanese company's last U.S. holdings, to RREEF America, a German-owned commercial real estate investment advisor.

The three-story, 200,000-square-foot property at 101 N. Sepulveda Blvd., primarily occupied by administrative offices of FedEx Corp., sold for $28.7 million.

Fujita Corp., a century-old publicly traded construction company based in Tokyo, created a U.S. division to invest in and develop U.S. real estate. Its first purchase was a Santa Monica hotel, the Miramar, in 1972, said John Pagliassotti, former director of asset management for Fujita.

At its peak in the late 1990s, Fujita owned more than 4 million square feet of industrial, office and hotel properties throughout the U.S. but primarily in California, said Pagliassotti, who now is a real estate broker with Voit Commercial Brokerage. He represented RREEF in its purchase of the El Segundo building.

The El Segundo office market near Los Angeles International Airport has long been a bastion of companies serving the defense and aerospace industries and has experienced dramatic swings in occupancy through the years as those industries expanded and contracted.

About 15% of the office space in El Segundo is vacant, Pagliassotti said. That's a slightly higher vacancy rate than in most parts of the Westside but about half of what it was during the mid-1990s, when the defense industry was shrinking. During that time, El Segundo-based defense contractor Hughes Corp. left 101 N. Sepulveda and several other buildings, he said.

Culver City-based Fujita Corp. USA sold the former Sheraton Miramar in 1999 for about $90 million to Maritz, Wolff & Co., a Los Angeles investment group. The hotel is now known as the Fairmont Miramar Hotel Santa Monica.

The purchase of the El Segundo office building brings RREEF's acquisitions this year to six properties valued at a total of $195 million. They include an industrial property in Van Nuys and an apartment complex in Sherman Oaks. San Francisco-based RREEF, which has $18.8 billion in assets, was acquired by Deutsche Bank in 2002.

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