The LA Deal Sheet
LA's tight industrial market had several recent sales that closed quickly and often above asking price after multiple offers.
Olivaceous, a Los Angeles garment manufacturer, bought a nearly 14K SF industrial building in downtown LA for $4.8M. Bradley J. Blahut of LA sold the building at 1107 East Seventh St., which sits on nearly 21K SF of land. Blahut had built the facility in 1976 for his printing and collating company.
Olivaceous will occupy part of the building immediately for warehousing and lease out the remainder of the property. Silver Commercial President Kathleen Silver said the property went under contract within a week of going on the market, where the industrial vacancy rate is below 2%. Silver and colleague Kay Sasatomi represented Blahut, while Sperry Commercial's Brent Koo and Lee Yoo represented Olivaceous.
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Rexford Industrial purchased a two-building industrial portfolio in Gardena for $6.7M, or $112/SF. NAI Capital Senior Vice President Dave Maron represented Rexford Industrial and the seller, Hershon Realty Co. and Redondo Realty Co.
"Within days of marketing the portfolio we received over 15 offers," Maron said. "With demand exceeding supply, market conditions are very tight. We were able to obtain $600K over the asking price."
The building at 15401 South Figueroa St. is 38,584 SF on 70,567 SF of land, and the building at 13225 South Western Ave. is 21K SF on 41,529 SF of land.
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CapRock Partners purchased a 97K SF industrial building in Commerce in an off-market deal that was substantially below current market value. Commerce is one of LA's tightest industrial submarkets. The building at 5331 and 5333 Slauson Ave. is 100% leased, and CapRock plans to subdivide the property and do an extensive renovation to create two separate industrial buildings, each with its own private entrance, yard and loading area.
SALES
Millenium Investment LLC has purchased a nearly 13K SF retail property at 3627 East Cesar Chavez Ave. in Los Angeles for $8.2M, or more than $640/SF. The property is leased by CVS Pharmacy. CBRE Senior Vice Presidents Alex Kozakov and Patrick Wade represented the seller, Paragon Commercial Group. CBRE debt and structured finance experts Val Achtemeier and Ed Balazs helped the buyer, whom Kozakov and Wade also represented in the 1031 exchange.
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The East Seventh Street Apartments, a mixed-use property with apartments over retail, sold for $3.05M in Long Beach. Stepp Commercial principal Robert Stepp represented the seller, Redempta Catolica Trust. Buckingham Investments represented the buyer, Tam Trust. The property, at 2307 East Seventh St., has 12 residential units and 10 retail spaces. The deal closed at a 5.3% cap rate.
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Intracorp has sold three office condos that make up the commercial portion of EightTwenty, a mixed-use residential development in South Pasadena, for $2.3M total. Avison Young Vice President Andrew Berk represented Intracorp in the sales to three owner-users — a dentist, an environmental sustainability consulting firm and a financial services company. The three office condos, with 1,242 SF, 1,084 SF and 698 SF, sold for around $764/SF. The sales were made prior to completion of EightTwenty at 820 Mission St., a 38-unit luxury mixed-use residential project. Move-in for the office condo owners is expected in early 2018.
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Marcus & Millichap arranged the sale of Anaheim Pine Plaza, a 4,440 SF retail property in Long Beach for nearly $1.8M. Marcus & Millichap Senior Managing Director of Investments Brandon Michaels had the exclusive listing for the property at 110 East Anaheim St. for the seller, a limited liability company.
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Arbo Properties purchased a six-unit apartment building at 1736 Griffith Park Blvd. in Silver Lake for nearly $1.8M, or $304K/unit. Marcus & Millichap First Vice President Jason Tuvia had the exclusive listing for the seller, a private investor. Arbo purchased the property in a 1031 exchange.
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The Heights Apartments, a 74-unit apartment building at 500 Ximeno Ave. in Long Beach's Belmont Heights neighborhood, has sold. Marcus & Millichap Senior Managing Director of Investments Kevin King represented the seller, an LLC. King and Senior Associate Ryan Gonzalez found the buyer, a private investor in a 1031 exchange.
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CenterPoint Properties has acquired a 6.8-acre site at 16627 South Avalon Blvd. in Carson. The site's buildings total nearly 85K SF fully leased to three tenants. Realty Advisory Group's Daniel Reaume and Rustin Mork represented CenterPoint.
FINANCING
A 258K SF, 13-story office tower next to LAX will be converted to a 129-key Hyatt House and a 272-key Hyatt Place Hotel. The property at 5959 West Century Blvd. in Los Angeles will create 1,000 new jobs.
George Smith Partners Vice President Zachary Streit arranged $50M in senior construction financing for the project on behalf of 5959 LLC, an affiliate of California Real Estate Regional Center.
“There is growing demand in the LAX submarket, and the current hotel stock is largely outdated,” Streit said. “As a result, this new dual-branded offering, which will feature a trendy, midcentury urban design, will be of immediate interest to business and leisure travelers.”
The non-recourse, interest-only loan is 50% of the total project cost. It has two one-year extension options. Hyatt House and Hyatt Place Hotel are expected to complete in 2019.
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Walker & Dunlop's Capital Markets group, led by Senior Vice President Gabriel Weinert, has structured a total of more than $109M in loans and equity for several land and multifamily development properties in California, Louisiana and Texas. Nine of the 11 properties were in California. The capital markets group, based in Los Angeles, worked with capital providers for the different needs of each property.
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Revere Capital provided $6.1M in financing to an LA-based restaurant operator for the purchase of the property it has leased for years. Terms of the loan were not disclosed. Revere Capital Senior Vice President Matt Turner was the loan originator. The 9,511 SF restaurant sits on a 33,511 SF lot on Sunset Boulevard.
This is the second recent transaction in LA for Revere Capital in the past few weeks. Senior Vice President Sarah Woodward facilitated a $5M short-term loan to an investor who wanted to add liquidity for buying commercial property before the end of the year.
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Sonnenblick-Eichner Co. arranged three separate long-term fixed-rate loans totaling $35.4M to refinance Best Western Plus Hotels in Lake Tahoe, Sacramento and San Diego for Vista Investments.
LEASES
A new Bristol Farms store has opened in Woodland Hills — the grocery chain's only location in the San Fernando Valley. CBRE's Tim Gensky represented Bristol Farms in the 30,501 SF lease in the El Camino Shopping Center at 23381 Mulholland Drive. Patrick Conway represented landlord Regency Centers in-house.
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Grocery Outlet has joined the redeveloped Crenshaw Imperial Plaza in Inglewood. CBRE’s Mitchell Hernandez, Kevin Phelan and Richard Rizika represented landlord Newmark Merrill, which co-owns the site with Upside Investment and collaborated on the redevelopment. The 230K SF shopping center underwent a $16M remodel. Other new tenants include Planet Fitness, Chipotle and Five Guys.
CONSTRUCTION
R.D. Olson Construction has completed the H Hotel in Los Angeles. The 12-story 260K SF dual-brand hotel next to LAX contains a Homewood Suites and Curio by Hilton. It has a transfer lounge on the 11th floor for travelers that includes seating, showers and lockers. A rooftop deck has views of the runways and ocean. The project at 6151 West Century Blvd. was an adaptive reuse of a 1962 office building. Other partners on the project, which took about 17 months to complete, include Melzer Decker Ruder Architects, Saiful Bouquet Structural Engineers, Robison Engineering and Design Force Corp.
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Marriott's West Hollywood Edition Hotel and Residences in Los Angeles recently topped out with the final placement of concrete at the roof level. The project, developed by Witkoff Group and designed by John Pawson in collaboration with hotelier Ian Schranger, will have 190 hotel rooms and 20 luxury residences. Thornton Tomasetti is providing consulting on the structural engineering and facade construction. It is scheduled for completion in 2018.
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Olive Hill Group has completed the interior renovation and rebranding of its 106K SF office building at 631 Olive, now called The Olive. The building houses fine jewelers and Olive Hill's corporate headquarters.
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Kamus + Keller Interiors | Architecture has relocated to its new downtown LA office in the historic 617 West Seventh St. building. Design and construction will continue for the remainder of the year. Hughes Marino's David Callahan represented Kamus + Keller in negotiations with building management, The Swig Co.
EXECUTIVE NEWS
C.W. Driver Cos. has named Carl Lowman as chief financial officer. Lowman will draw on his accounting and finance background with global engineering, consulting and construction services firms to enhance C.W. Driver's profitability and drive company growth. Prior to joining C.W. Driver, he was the vice president and West division business manager for Kleinfelder and worked for nearly a decade at MWH.
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NAI Capital has hired Michael Arnold as executive vice president and director of the tenant consulting group. Arnold will also be vice chairman of NAI Global's Tenant Consulting Group practice group. He will be involved in expanding the Tenant Consulting Group, with a focus on expanding NAI Capital's Southern California tenant consulting and NAI Global's corporate services.
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Laurie McCoy has been hired as principal and the new office practice leader for CannonDesign's LA office. McCoy is a healthcare design expert with 33 years of experience practicing design in Southern California, most recently with NBBJ.
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Robb Rugg has been appointed to Hacker Industries' board of directors. Rugg is the executive director of the Drake Group and brings more than 30 years of construction industry experience to the board.
KUDOS
The new U.S. Courthouse in Los Angeles was named Project of the Year by the Construction Management Association of America at its national conference and trade show. The U.S. Courthouse in Los Angeles topped the government category for projects valued at more than $50M and was named Project of the Year among all of the Project Achievement Award recipients. The 10-story, 633K SF building has 24 courtrooms and 32 judicial chambers.
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RealtyMogul won a Gold Stevie Award for Company of the Year in the Consumer Services category. The Stevie Awards for Women in Business recognizes women in leadership positions and the companies they run. RealtyMogul is led by CEO and co-founder Jilliene Hellman.
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Allsteel's new showroom at 555 South Flower St. in downtown LA has achieved WELL Certified Gold status in the International WELL Building Institute's Retail Pilot Program. The 10K SF showroom was designed by Wolcott Architecture Interiors.
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USC's Marshall School of Business and Price School of Public Policy took home the Silver Shovel in this year's NAIOP SoCal USC vs. UCLA Real Estate Challenge. The annual real estate competition has student teams compete to create the highest and best use for a unique land site. This year's challenge involved eight acres in El Segundo that are part of a more than 30-acre site owned by a Hackman Capital affiliate.
