Hackman Capital Partners just pocketed roughly $27 million selling a flex industrial building in El Segundo, and the price tag tells its own story: $480 per square foot for a property the firm bought for about $15.3 million back in 2018. The buyer, Majestic Asset Management, picked up 401 Coral Circle, a 57,000-square-foot building fully subleased by electric vehicle maker Rivian through 2034. It's a tidy win for Hackman at a moment when the rest of its real estate portfolio is anything but tidy.
The sale was first reported by Bisnow, which noted that Rivian subleases the entire building from Boeing and that the deal translated to $480 per square foot — a striking premium in a South Bay industrial market where, according to The Real Deal, typical top-tier sales in the second quarter settled in the $300s per square foot. Only one other South Bay industrial transaction that quarter reached a higher price, an anomalous outlier at $800 per square foot, per the same outlet's data. Hackman still owns another El Segundo property nearby, the creative office complex at 888 Douglas Street, according to Bisnow's reporting.
Aerospace and Defense Money Keeps Flowing to El Segundo
El Segundo and other South Bay cities are getting a lift from aerospace and defense-technology tenants looking to plant roots and expand, Bisnow reported. That demand helps explain why an aging flex building leased to an automaker fetched such a steep premium. The broader numbers back it up: Los Angeles industrial leasing activity totaled 15.7 million square feet in the second quarter, up 40.4% year over year, according to CBRE figures cited in the same report.
Five of the eight largest industrial lease transactions across all of Los Angeles during that quarter landed in the South Bay submarket alone, the article notes. Hackman's own 888 Douglas Street campus has become something of a showcase for that shift. The company bought the 30-acre, 550,000-square-foot property — a former Northrop Grumman military aircraft plant dating to the 1930s — in 2016 and has since poured more than $100 million into renovations, drawing tenants like hypersonic aircraft developer Hermeus, which leases 62,552 square feet, and Varda Space Industries.
Ad Agency Joins the Aerospace Crowd
Earlier in August, ad agency Innocean leased more than 100,000 square feet at 888 Douglas, per Bisnow's reporting. According to the Los Angeles Times, that 101,000-square-foot lease will consolidate nearly 600 employees from Huntington Beach into a former airplane factory whose rollup doors let vehicles drive directly inside for commercial production. It's an unusual pairing — an advertising agency moving into a building shared with hypersonic jet engineers — but it fits a pattern local brokers have flagged for years.
El Segundo levies no local gross receipts tax on businesses, a policy that regional commercial brokers have pointed to as a key draw for technology, aerospace, and corporate occupiers choosing the city, according to Commercial Real Estate Advisors. Combined with tight industrial vacancy, that tax structure has helped turn a stretch of aging Cold War-era manufacturing buildings into some of the most sought-after commercial real estate in the region.
Office Space Struggles While Industrial Thrives
The divergence is stark. South Bay office vacancy climbed to 24% in the second quarter, even as industrial vacancy stayed tight at just 5.5%, per The Real Deal's market data. That gap explains why a decades-old flex warehouse can outperform glossier office towers sitting empty nearby, and why investors like Majestic Asset Management are willing to pay a premium for buildings with long-term industrial tenants already in place.
That industrial strength stands in sharp contrast to what's happening across the rest of Hackman Capital's portfolio, where the company's studio holdings are drawing very different kinds of attention. Bisnow's report noted that Hackman's studio portfolio is garnering significant attention as the company pushes toward sales of some properties while lenders take over others. The debt on Manhattan Beach's MBS Studios has gone into default, and the debt on Fairfax's Television City has either defaulted or is under threat of default, according to the same reporting.
A Studio Empire Under Pressure
The distress runs well beyond those two properties. In January, Hackman defaulted on a $1.1 billion mortgage tied to the 1.2 million-square-foot Radford Studio Center in Studio City, prompting a Goldman Sachs-led lender group to take control and begin negotiating a potential sale to Netflix, as Hoodline previously reported. In April, a lender group filed for foreclosure on the historic Kaufman Astoria Studios in Queens over roughly $359 million allegedly owed by a Hackman-tied partnership, according to The Real Deal. And earlier this month, the former Sony Pictures Animation campus in Culver City landed on the public auction block after a $101 million loan default.
Lenders managing the defaulted $240 million mortgage on Hackman's 22-acre Manhattan Beach Studios campus — the lot that shot Avatar — have even evaluated repositioning the property for advanced manufacturing and defense-technology users rather than keeping it as a film lot. It's the same industrial and defense-tech pivot playing out successfully in El Segundo, only this time applied to a site built for Hollywood productions rather than aerospace hardware.
Taken together, the El Segundo sale looks less like an isolated win and more like a case study in how Hackman is navigating its broader financial squeeze. While its entertainment studio assets keep landing in default and foreclosure proceedings from Los Angeles to Queens, the firm's South Bay industrial holdings — anchored by aerospace, defense, and now advertising tenants — continue to command premium prices in a market still starved for space.
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