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Newmark Knight Frank Completes $97.15 Million Sale of 101 PCH, a 200,967-SF Creative Office Building in El Segundo, CA

Los Angeles, CA (11/20/2019)

7:00 AM

Newmark Knight Frank (NKF) has completed the $97.15 million sale ($483 per square foot) of 101 PCH, a 200,967-square-foot, low-rise, creative office building located at 101 Pacific Coast Highway in El Segundo, CA. The asset is 91 percent leased to four tenants with Infineon, a leading semiconductor manufacturer, occupying 67 percent of the property for its U.S. headquarters, and web hosting company DTI Services occupying 20 percent.

NKF's Co-Head of U.S. Capital Markets Kevin Shannon, Executive Managing Directors Ken White and Rob Hannan, and Senior Managing Directors Laura Stumm and Michael Moll represented the seller, a joint venture of AEW Capital Management and North Sea Capital Advisors. NKF Executive Managing Directors Eric Lastition and Geoff Ludwig were responsible for leasing the asset on behalf of the seller and served as local market experts in the marketing process. The buyer, a partnership of Nuveen Real Estate and Graymark Capital, was self-represented.

Over the past three years the seller invested nearly $20 million in capital improvements for a major renovation of 101 PCH, transforming the three-story building into creative office. The project was led by North Sea Capital Advisors President Scott Burrin.

Burrin noted, "We looked to contemporize and reimagine the tenant feel and experience of the property from the outside in, which included new draught tolerant landscape, electric charging stations, balconies, courtyards and lobbies. We also worked closely with Mul-Mac Architecture and the NKF leasing team to design and implement a first-in-market mini-suite concept, giving tenants the feel and benefits of communal space with the privacy and exclusivity of traditional office space; which has been received extremely well."

"AEW and North Sea Capital Advisors executed a tremendous repositioning of 101 PCH in El Segundo, one of Los Angeles' hottest markets," added Shannon. "Rents in this market have accelerated more than 50 percent over the last five years, largely driven by the repositioning and value-add initiatives of assets like 101 PCH."

Built in 1984 and situated on 2.9 acres, the three-story building is ideally located in a highly visible location on Pacific Coast Highway near the major cross street of El Segundo Boulevard. In addition to its modern spaces and tenant amenities, it also includes 738 parking stalls in a subterranean parking garage.

"With rents approximately 25 percent below market and a weighted average lease term of 7.23 years, the new ownership has the opportunity to realize an upside in rents as the leases expire, as well as long-term cash flow and appreciation of this attractive, functional and well-located asset," commented Hannan.

"El Segundo has clearly established itself as the CBD of the South Bay and is starting to behave like an extension of the lower Westside. With occupancy costs still at least 30 percent less than markets like Playa Vista and Culver City, El Segundo has tremendous room to run and provides a more proximate work location for the abundance of highly educated and affluent populations residing in the South Bay," added Stumm.

About Newmark Knight Frank
Newmark Knight Frank ("NKF"), operated by Newmark Group, Inc. ("Newmark Group") (NASDAQ: NMRK), is one of the world's leading and most trusted commercial real estate advisory firms, offering a complete suite of services and products for both owners and occupiers. Together with London-based partner Knight Frank and independently-owned offices, NKF's 18,000 professionals operate from approximately 480 offices on six continents. NKF's investor/owner services and products include investment sales, agency leasing, property management, valuation and advisory, diligence, underwriting, government-sponsored enterprise lending, loan servicing, debt and structured finance and loan sales. Occupier services and products include tenant representation, real estate management technology systems, workplace and occupancy strategy, global corporate services consulting, project management, lease administration and facilities management. For further information, visit www.ngkf.com.

Discussion of Forward-Looking Statements about Newmark
Statements in this document regarding Newmark that are not historical facts are "forward-looking statements" that involve risks and uncertainties, which could cause actual results to differ from those contained in the forward-looking statements. Except as required by law, Newmark undertakes no obligation to update any forward-looking statements. For a discussion of additional risks and uncertainties, which could cause actual results to differ from those contained in the forward-looking statements, see Newmark's Securities and Exchange Commission filings, including, but not limited to, the risk factors and Special Note on Forward-Looking Information set forth in these filings and any updates to such risk factors and Special Note on Forward-Looking Information contained in subsequent reports on Form 10-K, Form 10-Q or Form 8-K.

For Media Inquiries Contact:
Deb Bergman
Vice President PR and Communications
Newmark Knight Frank
T 303.260.4307