The new owners of the former Los Angeles Times printing facility in Costa Mesa are switching up redevelopment plans of the 24-acre site next to the headquarters of the Los Angeles Chargers, with a “high-end public market” concept alongside previously planned creative-office uses.
Foster City-based developer and investor SteelWave LLC partnered with the local office of Dallas-based Invesco Real Estate last month to buy the long-dormant site, which holds about 360,000 square feet of office and warehouse space.
The property, next to the Ikea shopping center just north of the San Diego (405) Freeway, once served as the headquarters for the L.A. Times’ Orange County edition but hasn’t been in operation for several years.
SteelWave and Invesco paid about $65 million to a partnership between Chicago-based Tribune Media Co.—former owner of the Times and Chicago Tribune, among other daily newspapers—and L.A.-based Kearny Real Estate Co. The sale price includes $9.4 million for an adjacent four acres on Harbor Boulevard that holds a baseball field.
In 2015, Tribune and Kearny announced plans to redevelop the site into Orange County’s largest speculative creative-office campus, calling the project The Press in a nod to its prior use.
The developers worked with the city on plans for the estimated $100 million project over the following two years, and got approvals for a preliminary master plan this past summer. The development’s first phase called for a three-story, 340,000-square-foot creative office and a 1,277-space parking structure.
Later phases were to include two more ground-up offices totaling 315,000 square feet on excess space at the campus.
Despite construction never commencing, the deal appears to have been profitable for Tribune and Kearny. According to the media company’s latest annual report, it had a 90% interest in the joint venture, and the property had a carrying value of $35 million and an agreed-upon value of $39 million as of earlier this year.
SteelWave officials said they approached the site’s former owners early this year with an off-market offer to acquire the project.
Busy Block
The purchase is the latest OC investment of the Newport Beach office of Invesco, whose local portfolio includes several offices in Aliso Viejo and a soon-to-open apartment complex in Irvine’s Park Place mixed-use campus.
The Costa Mesa acquisition is its first with SteelWave, which until 2015 operated as Legacy Partners Commercial.
SteelWave is plenty familiar with the immediate area in Costa Mesa. It owns the office campus next-door to the old press site, a three-building property it calls The Hive. It partnered with Goldman Sachs in 2015 to buy the 180,000-square-foot campus, which previously held the headquarters of chipmaker Emulex Corp.
The bulk of the newly renovated Hive is now leased to the Chargers football team, which also has a training facility there.
SteelWave Managing Director of Acquisitions and Development Seth Hiromura said in a statement that he believes having a cluster of creative offices next to a major OC artery makes sense from an ownership perspective.
“We think this project and submarket can be taken to the next level by creating a very dramatic public food hall-based retail concept,” he said.
New plans include building about 420,000 square feet of creative-office and retail space, including the public market, in the development’s first phase. That’s up by about 80,000 square feet compared to the first planned phase of The Press.
That would leave about 230,000 square feet of remaining entitlements for future development, the new owners said.
Specific plans for the food hall and offices haven’t been announced, nor whether all or part of The Press design would be pursued. It’s also unknown whether the Chargers franchise would play a part in any project plans.
SteelWave and Invesco said in a statement that they plan to redevelop the project over the next two years with the goal of building “a destination for both locals and visitors to the area.”
They’ve gotten $133 million from New York-based Square Mile Capital Management to fund the project.
It will be “the single most significant creative office opportunity in Orange County, if not all of Southern California,” Hiromura said.
The site sits about a half-mile from the South Coast Collection and OC Mix shopping center, one of the area’s first food- and experience-driven retail centers built since the recession. It’s about two miles from South Coast Plaza and three miles from The Lab and Camp, some of the city’s best-known retail centers.
Cushman Wakefield’s Rick Kaplan and Rob Lambert represented the sellers in the $65 million transaction.
Brokers with the Newport Beach office of Newmark Knight Frank will be handling leasing at the property for the new owners.
The new owners said financing for the buy was arranged by HFF’s John Rose, Todd Sugimoto, Patrick Burger and Olga Walsh.
