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West Los Angeles Office Market Catches Attention of Sunrise Real Estate Group

9 May 2014, 4:57 pm

By Alex Girda, Associate Editor

A West LA office building was recently acquired for a reported price of approximately $39 million. The off-market transaction was completed by a partnership consisting of Sunrise Real Estate Group with Robhana Group and 4M Investment Group who picked up the property from seller TPMC Realty Corp. Newmark Grubb Knight Frank representative Al Barasani handled the buyer’s end of the deal, while the seller represented itself. IDB Bank provided financing for the deal. The office asset last traded hands in 2008.

Located at 12301 Wilshire Boulevard in West Los Angeles, just west of the 405 Fwy, the 107,000-square-foot class A office building recently went through a capital improvement campaign. Former owner TPMC invested around $5.5 million in the Gensler-designed process which included upgrading the building’s exterior façade, and the renovation of the common areas, restrooms and lobby, while the elevators received brand new cabs, rentv.com reports.

In terms of occupancy, three quarters of the building’s office space is currently under contract. The facility’s tenant roster includes names such as film company Open Road Films and Opus Bank as well as a number of medical offices. Management duties for the property will be carried out by SRG Management, a subsidiary of the new owner.

Buyer Sunrise Real Estate Group has made the West LA building its second acquisition here this year, marking clear interest in the local real estate market. rentv.com noted that the recent West LA acquisitions mark a shift in the company’s usual investment moves, in which the company mostly focused on the San Fernando Valley market.

Image courtesy of tpmcrealty.com

Local Construct Breaks Ground on Innovative Housing Concept in Echo Park

2 May 2014, 2:52 pm

By Alex Girda, Associate Editor

A new housing project in Los Angeles’ Echo Park recently held a ground-breaking event, celebrating the innovative concept being introduced by the developer. Los Angeles-based Local Construct has started work on its Blackbirds micro-neighborhood. The community will be located on a site that formerly housed five rundown cottages in Echo Park.

One of the most important ideas on which the project is based upon is coming up with a walkable community focus, rather than on a car focus, which the developer believes is the current predominant trend in development in Los Angeles. The small lot urban infill development project aims to provide 18 new residential units situated in a heavily landscaped area. Blackbirds will become more than an average small lot multifamily infill project. It will try to introduce a new housing prototype in one of the city’s fastest growing neighborhoods.  

According to a press statement announcing the groundbreaking of Blackbirds, the community is the result of Barbara Bestor’s design. The units will feature pitched roofs that reference the rooflines of the area, creating an effect of “stealth density,” according to the architect Bestor. As previously mentioned, the multifamily project will not focus on the parking component, straying from the usual characteristics of residential development in the city, and of the West Coast which are mostly informed by the East Coast model.

Local Construct currently has projects underway in Boise, Idaho, and Eagle Rock, all of them based on the build smaller, build smarter mantra. The purpose is to provide modern, comfortable homes for the urban dweller employing high architecture, smart use of land and a new overall housing typology focused on the community, not on the units.

Image courtesy of blackbirdsla.com

New Affordable Housing Community by Affirmed Housing Group Holds Opening Ceremony

25 Apr 2014, 2:58 pm

By Alex Girda, Associate Editor

A brand new affordable housing community recently held an official grand opening in the presence of a number of local officials and backers. The Lotus Garden Apartments is Affirmed Housing Group’s latest affordable residential project in the L.A. metro area. The ceremony was attended by Councilman Gilbert A. Cedillo, the President and CEO of Affirmed Housing Group, James Silverwood, as well as Rushmore Cervantes, the executive director of the HCIDLA.

The all-affordable housing complex is located at 715-721 Yale Street and offers 60 units of residential space catered to families earning between 30 and 60 percent of the area’s median income. The community will include 15 studio units, 15 one-bedroom apartments, 10 two-bedroom apartments, as well as 20 three-bedroom apartments.

Lotus Garden Apartments will offer its residents an amenity package including a rooftop recreation area with panoramic views of the city, a tot lot, a barbecue area, and gardening plots; there will be a total of 4,000 square feet of open space. The ground level of the building will feature a community room, a computer lab and the management office occupying a total of 2,200 square feet.

Built to include a number of environmentally friendly fixtures such as high-efficiency boilers and solar water heating, the project will also aim to receive LEED certification from the U.S. Green Building Council, and it will feature SoCal’s first Harding Steel CARMATRIX parking system. The innovative system maximizes the use of space and number of cars that can be stored and will hold a total of 63 vehicles. CARMATRIX is a semi-automated process wherein residents park their vehicles on platforms that then move vertically and horizontally for a stacking effect. Other advantages of the system are the fact that it will only take up to 60 percent of the space a normal parking garage would, while maintenance and operation costs amount to a mere $100/month.

Rendering courtesy of affirmedhousing.org

ALTO Real Estate Funds Completes Moreno Valley Retail Acquisition to Start New Investment Fund

14 Apr 2014, 3:11 pm

By Alex Girda, Associate Editor

ALTO Real Estate Funds has started its second investment vehicle in the American market with a retail purchase in Moreno Valley, CA. The New York-based private equity real estate investment company has closed on the purchase of TownGate Center for a fee of $47.2 million. The property will be the first to be part of the new ALTO FUND 2, the investment vehicle registered in the state of Delaware, and it has a target investment value of $100 million.

TownGate Center is located 55 miles east of L.A. in an intensely trafficked area. Totaling 300,000 square feet of retail space, the property currently features a vacancy rate of nine percent and a tenant roster of long-term retail and dining names such as AT&T, Chipotle, Chase Bank, ULTA, Time Warner Cable, Wells Fargo Bank, TJ Maxx and Dollar Tree. ALTO will put in place a new leasing strategy that is set to bolster rental income by 25 percent during the following five years. 

ALTO financed the acquisition with the use of $15 million of equity and a $32 million loan provided by Deutsche Bank at a fixed interest rate at 4.55 percent.

The ALTO FUND 2 started out with an initial $33 million back in January, with the closing of the final stage of fundraising next month. The fund’s parent company has already invested in 15 different commercial properties, with its current portfolio totaling 2.1 million square feet and a total value of $330 million. The property has sold its stake in six different properties, the most notable being the sale of a Manhattan retail condominium worth $50 million. The fund is currently set to add more deals during the next few months in the California and Colorado markets.   

Image courtesy of Google Maps 

Brentwood Capital Partners Sells Iconic Citizen News Building in Hollywood

8 Apr 2014, 1:23 pm

By Alex Girda, Associate Editor

A historic Los Angeles office building was the object of one of the most recent real estate transactions to take place in the city. Buyer SE Edinger LLC paid a fee of $14.5 million for the Hollywood property. The property was sold by Brentwood Capital Partners, a full service real estate investment, development and management company. The two parties involved in the transaction were represented by Industry Partners and Coldwell Banker Commercial WESTMAC.  

The subject of this transaction is the home of Hollywood’s first ever newspaper, the Citizen News Building. The aging property offers the new owner a 48,900 square-foot office asset in a prime location at 1545 Wilcox Avenue at the intersection of Hollywood Boulevard and Highland Avenue. The 1930-built art deco styled property is the result of architect Francis D. Rutherford’s design. According to rentv.com, the building that housed the local Citizen News newspaper between 1935 and 1968, has gone through a multi-million dollar renovation process in 2006 that was meant to reposition the building and make it attractive to the demand from tenants in the media and entertainment sectors.

Given the recent upswing and demand for creative office space in the greater Los Angeles market, the property’s 16-foot high ceilings, skylights, operable windows and polished concrete floors have been great assets in the process of signing tenants. At the time of the transaction, the building had a six percent vacancy rate, placing it in the upper tier of office properties in the area. The Citizen News Building’s tenant roster includes names such as Larson Studios and Partizan Entertainment, confirming the interest of the entertainment industry in properties of this type.

Image courtesy of bcpmgt.com

Oprah Winfrey Network Signs Lease for CIM Group-Owned Office Building at The Lot

31 Mar 2014, 7:03 pm

By Alex Girda, Associate Editor

Oprah can always make headlines by just appearing somewhere, but this time, her company, Oprah Winfrey Network is the one in the news. OWN recently completed a leasing deal for a large chunk of space in a new office facility developed by local real estate company, CIM Group.

OWN will now occupy 60,000 square feet of creative office space out of the 98,000 square-foot building. The Formosa South building is part of CIM Group’s sprawling studio campus known as The Lot. The 11-acre project is located in West Hollywood on Santa Monica Boulevard and will also house OWN’s production necessities with the network having access to the existing sound stages and various production facilities.

Formosa South is a modern, recently completed office building that features high standards and is LEED Gold certified by the US Green Building Council. The creative office asset, built to the standards of the current trend in Los Angeles office market, features large floor plates, 13-foot ceiling heights, floor-to-ceiling glass with operable windows, as well as common terraces and balconies. The campus also offers great proximity to The Lot’s facilities such as the commissary and sound stages, a luxury OWN currently doesn’t have at its 5700 Wilshire Boulevard address.

The Lot offers a total of seven sound stages, post-production and office buildings that have seen much film and television history take place at the site. The 11-acre studio campus was founded in 1919 by Mary Pickford and Douglas Fairbanks and it served as the production site for films such as Guys and Dolls, Westside Story and Some Like it Hot. Since its acquisition by Warner Brothers in 1980, the property has seen shows such as The Love Boat, Dynasty, True Blood and The Social Network be produced on its premises.

Map courtesy of thelotstudios.com

One Santa Fe, Arts District’s Crown Jewel is Nearing Completion

24 Mar 2014, 2:17 pm

By Alex Girda, Associate Editor

One of the projects that marked a new uptick in development for Los Angeles is just months away from coming to market. The One Santa Fe mixed-use development, featuring the backing of real estate company Canyon Capital Realty Advisors, is poised to reposition an underutilized area of downtown L.A. The project, whose initial investor was Goldman Sachs Urban Investment Group, is now three quarters of the way into construction, and it will add retail, housing and art space to the area located between First and Fourth Streets, along Santa Fe Avenue.

Once completed, One Santa Fe will offer a total of 510,000 square feet of mixed-use space featuring a residential component of 438 residential units. The 80,000-square-foot retail component is already 50 percent leased, further underlining the area’s recent economic growth and need of new space. Backed by the Canyon-Johnson Urban Fund III, One Santa Fe is a $160 million investment in the emerging Los Angeles Arts District, one of the future focal points of the city’s downtown area. Eighty-eight of the community’s residential units are designated as affordable housing, while the remaining 350 will be made available at market rate prices. Access to the development will be made easy by the nearby Metro Gold Line at the Little Tokyo/Arts Districts Station, as well as the forthcoming Metro Red Line which has a proposed Arts District Station that connects to the “Subway to the Sea” project.

The project’s economic impact on the area is considerable as around 1,900 short-term jobs were created during the development process, and roughly 400 permanent positions will have been created once the project is occupied.

According to a recently issued press statement, Goldman Sachs Investment Group is going to be the purchaser of One Santa Fe’s residential component, as well as the New Market tax credits.

Architecturally speaking, the Michael Maltzan-designed development will feature flourishes that will link it with its surroundings. The industrial style adopted by the architect is evocative of the area’s heritage, as well as the nearby Los Angeles River and the nearby Southern California Institute of Architecture, which was formerly a freight depot.


CBRE Team Arranges Sale of Large Inland Empire Retail Center for $42 Million

16 Mar 2014, 4:52 pm

By Alex Girda, Associate Editor

The Inland Empire recently saw a large retail transaction completed when a Moreno Valley Property was acquired for a fee of approximately $42 million. TownGate Center was sold on behalf of the owning entity, a partnership between Walton Street and Fritz Duda Company, by a team headed by CBRE Senior Vice President Philip D. Voorhees. The SVP worked along with the National Retail Investment Group—West consisting of Megan Read, Jimmy Slusher, John Read and Brad Rable to represent the seller, as well as buyer Brixton Capital, a San Diego-based company in the all-cash deal.

The TownGate Center sits on a 28.5-acre site located in the immediate proximity of the Moreno Valley Mall. The retail property offers a total of 285,775 square feet of space. The current tenant roster is the result of an escalating leasing process at the facility, according to Phillip D. Voorhess, who said, “The substantial leasing activity at TownGate Center in the past three years, more than 100,000 square feet of new leases with tenants like TJ Maxx/Home Goods, BevMo!, ULTA and Planet Fitness, demonstrates the property’s appeal to expanding tenants.”

The current tenant roster includes other high-performing retailers such as Ross Dress for Less, Regency Theatres, Dollar Tree, and popular dining spot Chipotle. Two other CBRE employees, leasing professionals Walter Pagel and Barclay Harty acted as leasing agents at the property at the time of the sale, according to a press release announcing the acquisition.

Arranging the sale of the TownGate Center is an important milestone for the NRIG-West team, this being its 500th successful retail investment sale transaction. A total of 83 operations were completed by the team since the beginning of 2012, for a combined value of $1.7 billion. This transaction came about after heightened marketing activity, with the CBRE team’s marketing efforts distributing more than 460 memoranda to investors and brokers. Voorhees also told MHN, “Investor interest often follows tenant interest, and we expect increasing retail investment sale volumes in the Inland Empire over the next four to five years.”

SL Green Sells Stake in SoCal Office Portfolio as Los Angeles Office Market Shifts Away from Downtown

10 Mar 2014, 3:54 pm

By Alex Girda, Associate Editor

The ownership structure of a major office portfolio recently suffered some changes after New York City-based SL Green Realty Corp. announced that it had sold its stake in a Southern California portfolio to an affiliate of its joint venture partner. SL received $100 million from an entity linked to Blackstone Real Estate Partners VII for its 43.74 percent interest. The properties that comprise the portfolio are located across Southern California in major markets including Los Angeles, Orange County and San Diego.

The 28-asset portfolio offers the new owner 3.7 million square feet of office space. Originally, the portfolio included 31 properties and a total area of 4.5 million square feet which SL Green Realty Corp. acquired through foreclosure. The company then began restructuring the portfolio’s $750 million of in place financing. During the time of the restructuring, SL began its partnership with Blackstone, then acquired the minority interest in three of the properties. The seller went on to move those three properties in deals worth a total of $223 million, a recent press statement indicated. The portfolio then went through another extensive improvement and lease-up phase, handled by an affiliate of Blackstone, namely Equity Office Properties.

The greater Los Angeles’ office market has seen vacancy rates plateau at around 16.5 percent over past quarters, as data from Marcus & Millichap Real Estate Services indicates. The research shows that in 2013, around 510,000 square feet of office space was added to the available stock. Increased leasing at the end of the year meant that absorption in 2013 maintained the average vacancy rate for downtown Los Angeles at the same levels seen during 2012. Major improvement in terms of vacancy has been seen over the past few years in the San Fernando Valley where current values outpace L.A.’s downtown. The Westside Cities submarket has also seen rates drop, with vacancy now lower than the core of Los Angeles.   

Chart courtesy of Marcus & Millichap Real Estate Investment Services at marcusmillichap.com 

Los Angeles Apartment Communities Trade Hands as M West Expands Portfolio

17 Feb 2014, 5:52 pm

By Alex Girda, Associate Editor

The local multifamily market has had a good start to 2014, with a number of deals taking place since the beginning of the year. Recently, real estate investment services firm Marcus & Millichap announced that it had arranged the sale of a three-multifamily property portfolio in the Santa Monica submarket of Los Angeles. M West Holdings recently announced the acquisition of a number of residential properties, expanding its multifamily portfolio in the Los Angeles market.

The Marcus & Millichap-arranged deals were completed for a total fee of $28.5 million, according to a recently issued press statement. The three apartment assets located at 1033 3rd Street, 811 6th Street and 1137 11th Street total 66 residential units, acquired at a per-unit rate of $432,000. The three properties were built between 1963 and 1972. The deal was handled by Marcus & Millichap associates in the company’s L.A. office, Michael Hanassab and Elliot Hassan, on behalf of a private investor.

M West Holdings added almost 300 residential units to its Los Angeles multifamily property portfolio since the beginning of February alone. The company recently announced the acquisition of the Milano Apartments, a 248-unit luxury apartment complex located in Torrance. Originally built in 1964, the residential community was renovated between 2007 and 2009, and it offers a resident amenity package that includes fitness facilities, two tennis and basketball courts, secured covered parking spaces for residents, a lavish clubhouse, internet café, a business center, barbecue area, outdoor pools, a sundeck and a spa.

Also acquired by M West recently was Grafton Lofts, a 44-unit residential asset located in one of the best-known neighborhoods of L.A., Echo Park. The apartment community offers studio, one- and two-bedroom units located in the proximity of local staples such as the Baxter Stairway, Elyasian Park, Angelino Heights and Dodger Stadium. The property will be rebranded by its new owner, according to a press statement issued by M West.  

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