SANTA MONICA, Calif. - The Lionstone Group, a Houston-based real estate investment firm, announced today that it has sold their ground leasehold interest on a four-acre parcel at 1800 Stewart Street in Santa Monica to biotech company Agensys. Agensys, who specializes in the development of proteins to fight cancer, plans to build a 160,000 square-foot headquarters and state-of-the-
“This sale required almost two years of discussions with the City and local officials to obtain the assurances needed to move forward,” said Dan Dubrowski, a founding partner of Lionstone, “The end result was a huge win for all parties involved. Santa Monica keeps one of its most prestigious companies and a high quality, knowledge-based employer, Agensys purchases an ideal location to consolidate their operations into a new world-class facility, and Lionstone sells part of its Santa Monica holdings and delivers very solid financial returns for our investor.”
Agensys, a wholly owned affiliate of Astellas Pharma US Inc., develops antibody drugs in the treatment of cancer. Agensys will consolidate six separate facilities currently operating in Santa Monica to the new $95 million complex when it is completed in 2013. Construction will begin this month. It is designed to accommodate the firm's rapid growth from 180 employees to more than 300 over the next three years, according to Agensys Executive Vice President Paul Kanan.
“Our first choice had always been to stay in Santa Monica,” says Kanan. “The City provides a variety of first class amenities for our employees, many of whom live here and we have had very good results in both relocating talented employees from other parts of the country and also finding many good people locally. This property represented the best possible site for our employees and the future of our company.”
The former American Standard water heater manufacturing facility has remained fallow since being shuttered by the kitchen and bath appliance manufacturer in 1980. Currently located on the site south of Olympic Boulevard, are several obsolete steel Butler and concrete tilt-up industrial buildings that were built between 1950 and 1970. The property is immediately adjacent to the Bergamot Station Art Center and the future 26th/Olympic station of the planned Expo Light Rail Line that will run from downtown Los Angeles to Santa Monica. The site is part of a nine-acre parcel acquired by the City of Santa Monica in 1989 from Southern Pacific Railroad and was considered for use as a maintenance yard for the planned 15.2 mile Expo Light Rail Line. The Lionstone Group acquired the ground lease on the four-acre parcel in 2007 through Lionstone Cash Flow Office One, LP, a joint venture between Lionstone and the Oregon Public Employees Retirement Fund.
The sale of the ground leasehold to Agensys follows extensive negotiations with the City, initially to keep the proposed light rail yard off the 1800 Stewart site, and later to secure development approvals and extend the lease term, which was set to expire in 2030, according to Jacobsen, Lionstone's operating partner for commercial real estate development and brokerage.
“This was an extremely complex transaction with several moving parts, not the least of which was a comprehensive development agreement that provides numerous public benefits to the City, including a sculpture garden, pedestrian walkway, public café, and an internship program for local high school and college students,” says Jacobsen who worked with Lionstone and Agensys in the negotiations with the City. “However, the key to the deal was the significant extension of the ground lease term.”
Jim Jacobsen and Scott Rigsby of Santa Monica-based Industry Partners acted as the local operating partner for The Lionstone Group in the transaction. Agensys was represented by Matt Brainard of Studley.
About The Lionstone Group
The Lionstone Group is a privately owned real estate investment firm. Founded in 2001 by partners Tom Bacon, Dan Dubrowski, and Glenn Lowenstein, Lionstone serves the interests of real estate capital by performing extensive market research, conceptualizing and carefully executing national investment strategies based on proprietary data and ideas. Lionstone's investments include the Lantana Entertainment complex, Penn Station Studios and Broadway Place in Santa Monica. For more information, please visit www.lionstonegroup.com
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About Industry Partners
Industry Partners http://www.industrypartners.com is an entrepreneurial real estate services firm specializing in the representation of landlords, tenants, and developers, with a particular focus on creative work environments and adaptive reuse projects in West Los Angeles. The firm offers real estate brokerage, investment advisory, development and construction management services.