Opus West to Develop Site in El Segundo

A few weeks after establishing a Los Angeles office, one of the nation’s most active commercial real estate developers has pounced on its first project with the purchase of an El Segundo site, where it plans to build a speculative office building.

Opus West Corp., the regional operating company affiliated with Opus Corp. of Minnetonka, Minn., bought about four acres at Grand Avenue and Nash Street. It will erect a four-story building with about 126,000 square feet of office space, said the Colliers Seeley brokers who negotiated the land sale. No tenants have been signed.

Including the land purchase from Kearny Real Estate Co., Opus will invest more than $30 million in the development, said Colliers Seeley’s Dave Drummond, Steve Solomon and Craig Meyer. The site is the last piece of a 23-acre parcel that Morgan Stanley Real Estate Funds affiliate Kearny bought in the mid-1990s from a Chevron subsidiary.

Other portions of the 23-acre Grand Avenue Corporate Center house the new Lakers/Kings practice and training facility, the Infonet Services Corp. headquarters, a Hilton Garden Inn and a Courtyard by Marriott.

Gary Toeller, Opus West vice president of development in Los Angeles, will oversee the project. Opus also retained Seeley Colliers to handle leasing activities.

With technology companies and other tenants demonstrating strong demand for top-quality El Segundo office space, rents have continued to rise as vacancy rates have fallen into single digits. El Segundo’s newest multi-tenant office building--the nearby Continental Grand Plaza II completed last year--is already nearly full.

According to brokerage Grubb & Ellis Co., average annual asking rents for Class A buildings in the El Segundo/Manhattan Beach area surpassed $30 per square foot--the highest in the greater South Bay--during the second quarter. Overall, office vacancies in the area are now 9.3%, down from 12.1% a year ago.

Opus Corp., headed by founder Gerald Rauenhorst with help from his three sons, is one of the nation’s most prolific and diverse commercial real estate development firms. The company is especially active in other major West Coast metro areas such as the Puget Sound region of Washington and the San Francisco Bay Area.

In Southern California, Opus has been active mostly with office developments in south Orange County since opening its Irvine office in 1996.