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Hines and Oaktree Partner Yet Again for the Acquisition of Brea Place Office Campus

13 Jun 2014, 7:58 pm

By Alex Girda, Associate Editor

International real estate firm Hines recently announced the purchase of Brea Place, a sprawling office campus that also includes a plot of mixed-use development land, part of its ongoing partnership with Oaktree Capital Management. Financial terms of the deal were not disclosed to the press.

Brea Place is an office campus offering a total of 557,589 square feet of space in the North Orange County submarket. The campus comprises six office buildings ranging in height between one and six stories on the east and west sides of S. State College Boulevard, near the Brea Mall. The Brea Place campus has a current occupancy rate of around 75 percent and a variety of tenants. The property’s current tenant roster includes names such as Chevron, Merrill Lynch, MetLife, Wells Fargo, Sully-Miller Contracting Co. and Union Bank. After the completion of the transaction, Hines is assuming management duties for the asset.

Hines also acquired the 30 acre-property for the seven acres that are included in the package and clearly pose a great development opportunity. The acres are targetted for future mixed-use development projects that would increase the value of the asset in terms of future possibilities.

Ray Lawler, a Hines managing director and the person leading the company’s Orange County development and investment, said that the market that Brea Place is part of “is a highly attractive submarket where Hines and Oaktree expect to grow our portfolio.” Representatives of frequent business partner, Oaktree, share the positive outlook regarding the asset. Managing Director Ambrose Fisher noted that the company is “excited to partner with Hines on another significant office opportunity.”



Retail Opportunity Investments Corp. Announces Purchase of Fallbrook Shopping Center for $210 Million

6 Jun 2014, 3:12 pm

By Alex Girda, Associate Editor

Retail Opportunity Investments Corp. recently announced that it will become the new owner of a major retail center in the San Fernando Valley. The company has entered into a binding contract for the acquisition of the Fallbrook Shopping Center, for a purchase fee of $210 million in cash, from General Growth Properties. The transaction will reportedly be closed by the end of this quarter.

Fallbrook Shopping Center is a 1.12-million square foot shopping center located in West Hills, CA, and is one of the top retail properties in the West San Fernando Valley. The property’s current tenant roster includes three different supermarkets, namely Ralph’s, Trader Joe’s and Sprouts, while a diverse mix of national retailers such as WalMart, Home Depot and Target, is also part of the package available at Fallbrook.

In terms of leasing, the retail property is currently 98 percent under contract, with two-thirds of the agreements being completed with investment-grade rated retailers. The average remaining lease term for the property’s anchor tenants currently stands at around 12 years.

The acquisition of the Fallbrook Shopping Center will contribute to the enhancement of the new owner’s long-term cash flow and tenant diversification, while also increasing its pro forma unencumbered GLA to 87 percent. The acquisition is accretive to Retail Opportunity Investments Corp.’s net income and fund from operations per diluted share. The asset is located in a trade area that totals around 474,000 in population, with a median house-hold income of around $100,000 per year.

According the President and CEO of Retail Opoortunity Investments Corp., Stuart A. Tanz, the buyer expressed its excitement regarding the deal, noting the fact that “Fallbrook is one of the strongest shopping centers in the San Fernando Valley and is an excellent strategic fit with our existing portfolio, given its location and market position.”



Marcus & Millichap Arranges Sale of Two Playa Vista Retail Properties for $16.9 Million

31 May 2014, 12:57 am

By Alex Girda, Associate Editor

Marcus & Millichap’s Encino office recently arranged the sale of a two-property retail portfolio for a total of approximately $16.9 million. The two shopping spots are located in the L.A. submarket of Playa Vista. The acquisition was arranged by Marcus & Millichap Vice President investments, Brandon Michaels, and Janette Monfared, an associate with the Encino office. The seller is an affiliate of Brookfield Residential.

The two retail properties, Pacific Promenade and Seabluff Drive, are located at the ground floors of mixed-use projects in Playa Vista, at 13020 Pacific Promenade and the corner of Seabluff Dr. and Runaway Dr. respectively. According to rentv.com, the acquisition was made possible through the obtaining of nonrecourse CMBS debt at 65 percent loan to value. Arranged by MMCC’s Encino office, the financing totaled approximately $10.8 million.

Pacific Promenade is an 11,800 square-foot retail property, home to tenants such as Coffee Bean, Bank of America, Yoga Vista, Sweet Fish Sushi Bar and Hollyway Cleaners. The 2005-built property is located on the ground floor of a mixed-use community that also includes 179 condo units.

Seabluff Drive is a 10,900 square-foot retail center that was developed in 2007, as part of another mixed-use community, also featuring 179 condominiums on the upper floors. The property’s retail tenant roster features names such as Coldwell Banker, Playa Pilates, Yummy.com Fresh Market and Pinkberry.

The properties have an occupancy rate of 100 percent and were fully leased at the time of the transaction. Part of an already well-performing area of Los Angeles where the average vacancy rate stands at around 4.5 percent, the assets are overachieving. According to data provided by Marcus & Millichap Real Estate Investment Services, the Westside Cities area ranks fourth in terms of vacancy rates, trailing only the Tri-Cities, the Mid-Wilshire area and South Bay/Long Beach.

Image courtesy of Google Maps.

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



The Wolff Company Develops Mixed-Use Community in L.A.’s South Park District

23 May 2014, 3:12 pm

By Alex Girda, Associate Editor

A new community is nearing its official groundbreaking, with The Wolff Company currently set to start work on its latest mixed-use project. Poised to take shape in downtown Los Angeles, the 12th & Olive development is a $54 million project on which developer The Wolff Company is working with TCA Architects and Bernards.

Located at 1243 S. Olive in the downtown L.A. district of South Park, the new community will include residential and retail space as well as common space for resident amenities. The 293 residential units included in the seven-story structure will feature high-end finishes and long-term maintenance advantages. The building will feature a total of 17,300 square feet of ground-floor retail, while the common space will occupy a total of 7,000 square feet of space. Based on designs from TCA, the podium-like structure of the building will be the defining feature of the mixed-use project. 12th and Olive will be located near Staples Center, the home of the most important local sports franchises, the Clippers, the Lakers and the Kings, and the LA Convention Center, as well as “7th Street Restaurant Row” and the Grammy Museum.

The community will offer its residents high-end amenities such as a 24/7 on-site valet service and concierge service, creating a hotel-like experience. The project is very similar to the developer’s nearby 12th & Grand mixed-use community, with that project offering a slightly larger number of residential units and a slightly higher amount of ground-floor retail space. That project will take shape at 1200 S. Grand Avenue, creating a specific style of community for The Wolff Company in the downtown Los Angeles real estate market.

Image courtesy of awolff.com



Colliers Arranges Land Deal for The Olson Company, New Residential Development Set-up in Temple City

16 May 2014, 9:27 pm

By Alex Girda, Associate Editor

A parcel of land that formerly housed an industrial facility in Temple City in the San Gabriel Valley is set to be transformed into a new housing community by Orange County-based The Olson Company. The home builder recently acquired the land with the help of real estate firm Colliers International.

The brokerage worked on behalf of both Olson and selling entity, Ramshorn Corp., during the transaction. Colliers was also responsible for holding the transaction together through the process of getting plans for the housing development approved by local authorities. Senior Vice President Wayne Lambert, Executive Vice President Scott Heaton and Associate Joe Williams comprised the Colliers team in charge of the deal.  

According to Colliers, the developer will now look to build 74 new homes in Temple City. Olson Company is set to create a new gated community with a combination of single-family attached and detached homes that will be named “Linden Walk.” The neighborhood will include on-site recreational amenities for future residents, as well as a sound wall meant to minimize the amount of sonic pollution coming from the nearby Union Pacific Railroad line. The project is being referred to as a “walk,” given the developer’s focus on bringing resident amenities that are within walking distance of the new homes it builds. The amenities include mass transit hubs, shopping centers, schools and entertainment options.

Acquiring the former lumber yard site is no one-time deal for The Olson Company as the company’s Chief Executive Officer, Scott Laurie recently revealed. “We really like the San Gabriel Valley market and we continue to look for additional opportunities there,” Laurie said, focusing on the lack of inventory in the area and the existing demand for new housing projects as main reasons for the developer’s current strategy.   

Images courtesy of olsonhomes.com



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







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