GIC, Singapore’s sovereign wealth fund, has formed a joint venture to acquire a stake in a high tech office portfolio in the Playa Vista area of western Los Angeles, according to a statement today by the $100 billion government investment vehicle.
The transaction provides GIC with an interest in more than 500,000 square feet (46,000 square metres) of business park assets in the area known as Los Angeles’ “Silicon Beach” that New York’s Rockwood Capital, has been acquiring since 2016.
In its statement, GIC positioned the investment as a way to ride opportunities in the US’ second-largest urban economy, especially the growth of the technology and creative sectors in southern California. The amount of GIC’s investment and its stake in the joint venture were not specified.
Rockwood Capital Rewarded for Buying into Playa Vista
“This investment reflects GIC’s long-term confidence in the West Los Angeles office market,” Lee Kok Sun, Chief Investment Officer for GIC Real Estate said in a statement. “We expect continued growth of the technology and creative media industries to benefit this dynamic national and international gateway.”
Lee’s latest investment includes Water’s Edge, a 259,000 square foot two-building creative office campus in northwest Playa Vista, which Rockwood Capital acquired in January of this year for $190 million, as well as Playa Jefferson, a 251,000 square foot five-building complex on Jefferson Boulevard in central Playa Vista. Rockwood bought Playa Jefferson from Vantage Property Investors for $165 million in July 2016.
Rockwood, which is led by New York-based partners Peter Falco and Walter P Schmidt, recently began construction on the $80 million WE3 project, the 190,000 square foot third building in the 6.5 acre (2.6 hectare) Water’s Edge complex, according to an account in the Los Angeles Times. GIC estimates the new addition to the Water’s Edge complex will be complete in the second quarter of 2020.
GIC Bets on the Silicon Beach Experience
The LA Times report cited data from CBRE indicating that asking rents in Playa Vista averaged $5.53 per square foot per month in the first quarter, with sources at the agency, which represents Rockwood, as indicating that there are “virtually no additional development sites left in Playa Vista.”
GIC’s new LA properties play to the city’s developing tech industry, in what is rapidly becoming a centre for online and offline media firms.
The Water’s Edge campus incorporates a swimming pool, volleyball court and LA Fitness gym, and the project counts among its tenants gaming giant Electronic Arts and CBS/Lionsgate joint venture Pop Media Group. Google is also setting up in Playa Vista, where the search giant has taken over the airplane hangar which formerly housed Howard Hughes’ Spruce Goose.