A high-profile parcel once slated for an office and retail development to complement the new headquarters for the Los Angeles Chargers professional football team in El Segundo is now poised to make waves as a different property use.
A company tied to billionaire Vinny Smith’s Toba Capital has spent $54 million for a 9-acre slice of the former Raytheon Technologies Campus at 100 Nash in the city adjacent to Los Angeles, according to CoStar data.
The firm is expected to build a surf park, a type of mixed-use real estate that is gaining traction across the globe with improvements in artificial wave technology and consumer demand for experiences in the wake of the pandemic.
Smith, one of Orange County, California's wealthiest residents, made his fortune selling his tech firm to Dell Computer. He's also a surfing enthusiast who has converted a former water park in Palm Springs into a surf club and wants to replicate the concept in Los Angeles and possibly other cities across the country, brokers tell CoStar News.
These parks revolve around a high-capacity surf pool — some are capable of generating 1,000 waves per hour — with hospitality, retail and residential components. Investors and brokers say they are gaining popularity as training tools and entertainment hubs, even in Southern California, where surfers have miles of real beaches to surf.
“You have so much coastline and so much density of population and the popularity of the sport, and at the same time, [beaches] have issues with parking, too many people in the water and contamination levels from rain runoff and sewage breaks,” Chris Maling, a principal at Avison Young who was not involved in the deal but has tracked South Bay commercial real estate for decades, told CoStar News.
The timeline for the El Segundo project is unclear. Large-scale developments in Los Angeles — even those with backing from well-heeled investors and local government — face a gantlet of challenges including sky-high construction and labor costs and interest rates, as well as community opposition.
Toba Capital did not respond to a request to comment from CoStar News.
Growing entertainment zone
Toba Capital acquired the El Segundo site from Continental Corp., a California landlord with millions of square feet of properties along the South Bay coast. Continental bought the 30-acre corporate campus from Raytheon in 2021 and launched plans to redevelop it into a 600,000-square-foot mixed-use complex called Impact at Nash, with office, retail and media production space.
Continental and its partner Mar Ventures first redeveloped a 14-acre portion into the Chargers' $260 million training center and headquarters, which opened in 2024. At that point, demand for the rest of the parcel fizzled and Continental decided to cash out, brokers tell CoStar News.
The pivot for the 9-acre parcel comes during a period of evolution for the retail and hospitality industry, with consumers favoring activities, events and diversified shopping hubs over more traditional brick-and-mortar stores. The office sector, meanwhile, remains in a deep state of recovery nearly six years after the pandemic emptied such buildings across the nation, according to CoStar research.
The new surf park will be near a 33,000-square-foot Topgolf, the Porsche Experience Center Los Angeles in Carson and the headquarters and training facilities of several major professional sports teams.
The park will also be close to the ocean for surf enthusiasts seeking reliable conditions and beginners and families who can't hang with the tight-knit surfing groups that dominate the famous South Bay beaches, according to Maling.
“El Segundo is saying, ‘We want to be put on the map as an entertainment zone,’” Maling said.
Coastal pushback
The global surf park and wave pool industry is valued at $4 billion, with forecasts of 20% annual growth, according to trade group Surf Park Central. The U.S. is wide open, with only a few parks completed and a few more planned.
Wave pools are nothing new, and slow surf simulators by companies like FlowRider have been operating for decades in compact settings like cruise ships, restaurants and hotels, producing continuous waves over a shallow pool that are entertaining for beginners but don't mirror a realistic ocean experience that regular surfers crave.
But recent tech advances in hydraulic, pneumatic and mechanical systems can now produce long, rideable waves suitable for drawing tourists and even permanent residents, with some projects selling homes alongside wave pools.
Some 20 surf parks are operating worldwide, with four open in the U.S. and several opening in the next two years. Kelly Slater Wave Co., with its own proprietary wave technology, operates a complex at Surf Ranch in Kings County, California, and provides its technology to the Surf Abu Dhabi leisure center in the United Arab Emirates.
Vinny Smith's surf park company opened its first surf venue, called the Palm Springs Surf Club, in the desert resort town 100 miles from downtown Los Angeles in January 2024. Smith and investors spent $80 million to upgrade the former Knotts Soak City water park into the 21-acre complex where 25 surfers can ride in the wave pool at a time. The development also includes a lazy river and several eateries.
In San Diego County, developer N4FL plans to break ground next year on Ocean Kamp, a sprawling resort complex featuring a 3.5-acre wave pool, 700 housing units, a 300-room hotel and commercial spaces on a 92-acre former drive-in theater site in Oceanside.
In Newport Beach, a proposal for a 7-acre wave pool is moving forward, though the plans, involving the replacement of a portion of the public Newport Beach Golf Course, have sparked significant pushback from residents.
For the record
Cushman & Wakefield's Michael Condon Sr., Michael Condon Jr., Chris Sinfield, Steve Bohannan and Kylie Rawn represented the buyer and the seller in the deal.