The Desmond will Join Creative Office Building Inventory in L.A.’s South Park District

By Alex Girda, Associate Editor

Lincoln Property Company is looking to capitalize on the growing demand for creative office space in the Los Angeles metro area and has snapped up an intriguing property in the city’s downtown. The company recently announced that it is finalizing the deal for The Desmond building, a property that has gathered quite the history in its nearly 100 years of existence. The space will be completely renovated and converted to match current standards for its type of property. The revamped facility would also benefit from proximity to the growing L.A. Live entertainment district.

The Desmond is a vacant five-story building located in downtown’s South Park District. When completed, the construction will offer potential tenants a total of 78,500 square feet of newly renovated creative office space. The refurbishing process at the property will begin immediately, with the process set to last for a year. With ceilings ranging in height from 11 to 16 feet, the building looks like a great candidate for a Class A property, especially in a growing market.

The facility features 15,600 square foot floor plates throughout, as well as an adjacent surface parking lot which the new owner will use to support the building’s office and retail residents. Renovations will deal with building mechanicals, new windows, and brand new interior finishes while maintaining the attractive sense of spaciousness and rooftop views. The location is in close proximity to the city’s Metro rail system, Downtown Dash Bus station and major roadways. Additionally, local authorities are considering restoring the Downtown Streetcar service which would have a stop just next to The Desmond. Leasing for the building is already underway

Long Beach Senior Affordable Community Finally Holds Groundbreaking

By Alex Girda, Associate Editor

A major step was taken to ensure that an important residential development in Long Beach will have new life following a number of funding delays due to redevelopment legislation. However, the Ramona Park senior affordable housing development has managed to pull through and recently held a groundbreaking ceremony, confirming the local market’s need for projects of its kind. The affordable housing community is being handled by Palm Communities and Western Community Housing, a nonprofit organization that specializes in affordable housing projects.

Ramona Park Senior Apartments will be a 60-unit housing community for residents that are over the age of 55 and earn less than 60 percent of the area’s median income. Located at 3290 E. Artesia Boulevard, in the immediate vicinity of Ramona Park, the development will feature 48 one- and 12 two-bedroom residential units. The community’s amenity package will feature a common courtyard, a pool, picnic area, spa, fitness facility, fire pit, classroom, rec rooms and other common rooms including a computer room, dining area, and library. The development process will employ standards reaching minimum LEED construction requirements, as well as local green building regulations.

Financing for the project was partially raised with $7 million in low-income housing tax credit equity from WNC, an entity dealing with community development projects across the U.S. That measure is a federal tax facility that acts as an incentive for developers aiming to construct affordable rental housing communities for low-income residents. The total development cost for the Ramona Park Senior Apartments will reach $22.5 million by the completion date set for April 2014.    

New Renaissance Hotel will Join Already Impressive Hospitality Roster at L.A. LIVE

By Alex Girda, Associate Editor

The L.A. Live development has reimagined a troubled area of downtown Los Angeles by injecting a new sports and convention space-anchored complex. The revitalization of the area surrounding the STAPLES Center seems to be a success as the company responsible for the L.A. LIVE concept, AEG, recently sold a 60,000-square foot land parcel to Williams/Dame & Associates which will be used for a new hotel project. The reported investment would be of around $200 million, and the developer intends to operate the venue as a Renaissance Hotel, one of the brands under the Marriott International canopy.

The 450-key facility will be located at the northeast corner of Olympic Boulevard and Georgia Street. This would be the fourth hospitality spot to be operated under a brand owned by Marriott International in the area. The new Renaissance Hotel joins an existing 123-key, 5-star Ritz-Carlton Los Angeles Hotel owned by AEG, the JW Marriott Los Angeles LIVE Hotel featuring 878 rooms, and two other properties currently in development that will be part of a 24-story high-rise scheduled to open in July 2014, both owned by Williams/Dame & Associates and American Life, Inc. When completed, the two hotels will add around 400 rooms to the area’s Marriott-operated inventory.

With the new Renaissance Hotel beginning construction in Q1 of 2014 and a completion date set for 2016, the L.A. LIVE area looks forward to offering a plethora of hotel options, with 1,844 rooms featuring five different Marriott brands: Ritz-Carlton, Renaissance, JW Marriott, Courtyard and Residence Inn. The venues will ensure that visitors will have a variety of hospitality options when checking out one of the many attractions of the entertainment district: STAPLES Center, the Los Angeles Convention Center, Nokia Theatre L.A. LIVE, Regal Cinemas and the GRAMMY Museum.

Image: L.A. LIVE, courtesy of lalive.com

Bixby Office Park Acquired for $85 Million; TIAA-CREF Expands Portfolio With Industrial Purchase

By Alex Girda, Associate Editor

It was recently announced that the Bixby Office Park has been acquired by a private, fully integrated real estate investment company. Parallel Capital Partners sealed a deal worth approximately $85 million to secure the commercial asset in Seal Beach, CA. This constitutes the largest office transaction in Orange County in 2013. The seller was a large national insurance company, represented by an Eastdil Secured team consisting of Adam Edwards and K.C. Scheipe. The buying entity was PCPI BIXBY LP, an affiliate of Parallel Capital, which represented itself.

The 297,200-square foot complex occupies a 16-acre lot at 3001-3005, 3010, 3020 and 3030 Old Ranch Parkway, in close proximity to the 405 Freeway. Originally developed in 1987, and featuring an above average occupancy rate of approximately 98 percent, the complex features a tenant roster including names such as Baker Corp, SAIC, Olson Urban Housing, Seagate Offices and Clean Energy Fuels Corp.

In other real estate news from the area, TIAA-CREF recently completed the acquisition of an industrial property in Carson. Located at 16325 S. Avalon Boulevard, the multi-tenant warehouse and distribution asset offers up 210,700 square feet of leasable space. The property was bought from Trammell Crow, an entity specializing in the sale of completed spec developments to investors.

The value of the transaction made by Teachers Insurance and Annuity Association – College Retirement Equities Fund was not disclosed. The facility is a Class A commercial real estate property that was developed on a land parcel bought by Trammell Crow back in 2011 from Evergreen USA. The company later developed the property which features 26 loading docks and 32-foot-high ceilings and is pending LEED Silver certification.  

Image courtesy of bixbyland.com

Creative Office Building in Santa Monica Secures Refinancing Deal as Silicon Beach Concept Gains Traction

By Alex Girda, Associate Editor

Holiday Fenoglio Fowler recently announced that it has provided a refinancing plan to The Luzzatto Company, Inc. and Welk Real Estate, Inc. HFF arranged $14 million for the property located at 2700 Pennsylvania Avenue, a creative office building in one of the country’s budding markets for tech-oriented tenants. With Microsoft as the latest company to express its interest in Silicon Beach, a number of office space owners are looking to recapitalize on their local assets in order to make sure that their properties will be among the ones that bring in the next big tech names to the area.

2700 Pennsylvania Avenue is a 62,000-square-foot creative office building that will benefit from its proximity to the upcoming Bergamot Station on the Expo Light Rail line, when it opens in 2015. The building has a 100 percent occupancy rate with its two lease holders Yahoo! and Jakks Pacific. HFF secured a seven-year, fixed-rate loan through Principal Real Estate Investors on behalf of Welk and The Luzzatto Company through its debt placement team led by Director Chris Vittetoe and Real Estate Analyst Steven Paskhover.

2012 was a positive year for Santa Monica’s office sector, with vacancy rates not exceeding an average rate of 10.3 percent. Q3 was by far the best timeframe for the area in terms of occupancy with only 9.6 percent of the total office space in the area being left unoccupied. Q4 saw a slight bounce in vacancies; Santa Monica finished 2012 with an average vacancy rate of 10 percent, according to data compiled by Reis Reports, a provider of commercial real estate performance information and analysis.

Market Data Courtesy of Reis Reports