This Week’s LA Deal Sheet
LA-based Paragon Commercial Group along with Canyon Partners Real Estate just closed the $43M sale of Hawthorne Plaza. We caught up with Paragon Commercial Group’s Erwin Bucy to discuss the deal.
The sale of the 97,700 SF grocery-anchored retail center (12620-12770 Hawthorne Blvd) in Hawthorne is the first in the two companies’ JV under Canyon Partners Real Estate’s Canyon Catalyst Fund.
The JV was formed to acquire properties throughout the state. The JV was initially attracted to Hawthorne Plaza, anchored by Superior Grocers, for a variety of reasons, Erwin tells us.
The property is on "one of the most highly trafficked intersections" in Hawthorne, and the tenants "have a lengthy history of performing very well,” he says.
Paragon was able to reposition the property with new anchor tenants and lease vacant space to make it 100% leased, according to Erwin.
The move made it “an excellent asset for a core buyer,” Erwin says.
Other tenants at Hawthorne Plaza include Providence Health Systems, Citibank, Ashley Stewart, GNC, Kinecta Federal Credit Union, Radio Shack, Popeye’s, AT&T, Starbucks and Subway.
Holliday Fenoglio Fowler’s CJ Osbrink, Bryan Ley and John Crump and JLL’s Geoff Tranchina marketed the property.
SALES
Marcus & Millichap sold a 24-unit apartment building in the Mid-Wilshire District (425 South Detroit St) for $6.4M. The four-story building sits on a 7,800 SF parcel and has two floor plans: eight 560 SF one-bedroom units and 16 650 SF apartments. Interiors have nine-foot ceilings, granite countertops, laminate wood-plank and tile vinyl flooring, white appliances and wood cabinetry.
The property sold for just over a 3% cap rate on current operations.
Marcus & Millichap’s executive VP of investments, Ron Harris, along with VP of investments Paul Darrow and senior associate Michael DiSimone repped the seller, a private investor, and procured the buyer, Timberlane Partners.
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Charles Dunn Co completed the $2.45M sale of a vacant two-story, 6k SF office property (1137 to 1141 W 6th St) in DTLA. John Anthony, Chris Steck and Chris Giordano of Charles Dunn Co repped the seller, a family trust from Los Angeles. Collier’s Tim Dwight repped the buyer, Rancho Gomez Investments. The buyer will use the space for its legal practice.
CBRE Group sold Canwood Business Park in Agoura Hills for nearly $21M to Majestic Asset Management and JS/JS Properties. The 120k SF property (5126, 5137, 5142, 5155 Clareton Drive) includes office and industrial space. Majestic wants to make the property a creative office and flex campus.
The property, whose new name will be Tech Park @ Canwood, has clear views of the Santa Monica Mountains and is walking distance to nearby amenities, including Trader Joe’s, Wildflour Bakery, the Habit Burger and Jinky’s Cafe.
The acquisition will allow Majestic Asset Management to “capitalize on the ongoing transformation of the creative office market in the Conejo Valley,” CBRE’s Troy Pollet tells Bisnow.
The firm wants to create a progressive office environment with abundant natural light and access to numerous walkable amenities, he says.
Troy, along with CBRE’s Matthew Heyn and David Solomon repped the buyer. The Johnston Group's Steve Morse repped the seller.
Marcus & Millichap arranged the sale of Verona Villas, a multifamily property in Toluca Lake, for $14.7M. The price (around $701k/unit) is reportedly the highest price on record for an apartment in Toluca Lake. Verona Villas (10640 Woodbridge St) consists of 21 one-, two- and three-bedroom condos. The sizes range from 1,200 SF to 1,800 SF. The property has gated, underground parking with guest spaces and a fitness center.
The units have central air conditioning, hardwood floors, granite countertops, and in-unit full-size washer/dryers. Penthouse apartments with rooftop decks are also available.
Marcus & Millichap’s Jeff Louks and Daniel Hirth, a senior associate, both in the firm’s Encino office, repped the seller, the property’s developer. Marcus & Millichap’s Matt Ziegler, a first VP of investments, found the private investor buyer.
FINANCING
Quantum Capital has arranged $22.15M in long-term, non-recourse debt to refinance regional shopping centers in the Texas cities of Frisco and San Angelo. Quantum secured a $12.9M non-recourse permanent loan for an LA-based investor, operating as TRT-QL Frisco, to replace the maturing debt on Frisco Plaza, a 62.5k SF retail center in Frisco. Quantum was able to arrange attractive terms despite the lender’s concerns that a single special use tenant represented a large percentage of the rent roll.
Quantum also secured a $9.15M permanent loan for another LA-based investor, operating as Rancho Sunset Plaza LP, to refinance Sunset Plaza, a 90k SF regional power center in West Texas. Sunset Plaza is anchored by Target, Bed, Bath and Beyond, Petco and Ross.
Both fixed rate loans were underwritten at 75% LTV and priced at around 250 basis points over the 10-year swaps. The financing arrangements include three years interest only.
NorthMarq Capital arranged the $7M refinance of a 25k SF vacant office building in Irvine. The transaction was structured with a two-year interest-only term. The financing was arranged for the borrower through a debt fund. The non-recourse, 30-day LIBOR floating-rate loan featured an 80% loan-to-cost and 12 months of yield maintenance.
The loan also included a future funding component for the client to draw upon to complete significant site improvements to the property and tenant improvements to the suites.
NorthMarq Capital's VP of LA’s regional office, Joe Giordani, arranged the transaction.
LEASES
Pepperdine University leased a 107k SF Class-A R&D building (26750 Agoura Rd) in Calabasas for administrative and other offices. The property had most recently been occupied by Spirent Communications.
Pepperdine has leased the property for 10 years with options. Lee & Associates-LA North/Ventura’s Mike Tingus and Grant Fulkerson repped the lessor, Cypress Land Co. Pepperdine was repped by Cushman & Wakefield. The brokers, Jeffrey Welch and Lynn Williams, have since joined CBRE.
EXECUTIVE NEWS
Peter Sherman (pictured above with his children, Leo and Madeline, at Lake Tahoe) has joined Avison Young as principal. He will lead the firm’s Southern California multifamily institutional investment sales practice and expand the practice in LA and throughout Southern California. Sherman has 11 years of commercial real estate industry experience as a principal, broker and asset manager. He was most recently a senior VP with CBRE and was previously a founding partner of Multi-Housing Capital Advisors and a senior VP with Transwestern. In addition, Sam Chow has joined Avison Young as VP at the West LA office and Roger Dela Rosa as a marketing director, focusing on the multifamily institutional investment practice. All were previously with CBRE in LA and will work as a team.
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J.C. Casillas was promoted to VP at NAI Capital. He will be in charge of research, marketing and communications and will work in the Encino office. J.C. joined NAI Capital in last March as director of research and public relations. He comes from NGKF, where he served as regional VP, director of research and marketing. He was previously at Grubb & Ellis.
