Varda Space Takes Over Former Mattel Facility in El Segundo

Varda Space Industries is trading toy design for spacecraft manufacturing, signing a lease on a 205,443-square-foot El Segundo facility that Mattel used for decades before the toymaker consolidated its operations elsewhere.

The move puts Varda, which manufactures capsules that carry pharmaceutical compounds into orbit and back, into a building at 2031 E. Mariposa Ave. that has a longer aerospace pedigree than its most recent tenant might suggest. The structure was originally built in the 1940s to serve the South Bay’s aircraft manufacturing sector, part of the dense industrial cluster that defined the region during and after World War II. Mattel moved its headquarters from Hawthorne to El Segundo in 1991 and occupied the space for decades, but the toymaker and the building were always an odd couple by history.

GPI Cos., the property’s landlord, brokered the lease with CBRE Group facilitating the transaction. Mike Woods, a partner at GPI, framed the deal as a return to form. “2031 E. Mariposa has always been an exceptional property with a legacy tied to aerospace innovation,” Woods said in a statement, “and leasing to Varda Space Industries feels like a natural continuation of that story.”

Varda was founded in 2021 on a specific pharmaceutical thesis: that manufacturing certain drug compounds in microgravity produces superior crystal structures compared to Earth-bound production. The company’s capsules carry active pharmaceutical ingredients into low Earth orbit, where the absence of gravity changes how those compounds form at the molecular level, then return the materials to ground for processing. It is a manufacturing model that did not exist as a commercial enterprise five years ago.

The company has raised roughly $330 million since its founding, including a $187 million round closed last June. That capital has funded both mission operations and the infrastructure build-out that a larger facility now supports.

Jonathan Barr, Varda’s chief operating officer, said in a statement that the additional square footage addresses a production bottleneck. “This move gives our teams increased capacity and infrastructure to scale production, accelerate mission cadence, and continue delivering for our customers,” Barr said. The company did not specify how many employees would work out of the new facility or provide a timeline for full operational capacity.

El Segundo Mayor Chris Pimentel welcomed the expansion in a statement that pointed to the city’s broader aerospace identity. “For nearly a century, El Segundo has been synonymous with aerospace excellence,” Pimentel said. “Varda’s continued expansion reaffirms that our city remains a strategic hub for industry-defining companies shaping the 21st century.” The city’s aerospace tenant roster already includes major names across defense, satellite, and launch sectors, and Varda fits a newer layer of that ecosystem focused on in-space manufacturing rather than traditional aerospace hardware.

The real estate backdrop matters here too. According to CBRE, the South Bay leased 9.8 million square feet of commercial and industrial space in 2025, a 16.2% increase over the prior year. That figure reflects sustained demand from aerospace, logistics, and advanced manufacturing tenants competing for a limited pool of large industrial properties with the ceiling heights, power capacity, and loading infrastructure that serious production operations require. A 205,000-plus square foot block does not sit idle long in that market.

For Varda, the facility’s sheer size represents a meaningful step up. Manufacturing spacecraft capsules at volume is a different operational challenge than building prototypes or running a handful of missions annually. The El Segundo footprint gives the company room to run parallel production lines and increase mission frequency without the physical constraints of a smaller facility.

The pharmaceutical applications Varda is pursuing are still early-stage commercially, but the company has completed orbital missions and returned capsules to Earth. The question for investors and customers alike is whether the microgravity manufacturing advantage proves durable enough to build a reliable supply chain around. A bigger building in a historically aerospace-rich city is one piece of that argument.