This Week's LA Deal Sheet
Brandon and Brenda Walsh may have moved out long ago, but you still can't beat a Beverly Hills 90210 address.
With this in mind, ETCO Homes principal Bob Etebar tells us that construction is nearly complete on the company's latest luxury condo development in the gilded ZIP code: the 35-unit 460 Palm. Units will be delivered in late spring, with some units already under contract. The project (460 N Palm Dr) is the sister building to ETCO's 432 Oakhurst condo project, where Justin Bieber famously rented a penthouse and whose rowdy parties were the subject of much tabloid fodder. (The hell-raising renter recently moved out.) Bob says the economy was starting to get some legs under it when 432 Oakhurst hit the market in late 2013, and the project sold out in just one year.
While 460 Palm has larger floor plans (up to 3,643 SF), Bob expects the buyer profile to be similar, including significant interest from international buyers. Over the past 11 years of building and selling projects in Beverly Hills, he says the company has had buyers from the Middle East to Russia, and from the Far East to Canada, Australia and New Zealand. Typically, they're looking for a second home, have children attending college in SoCal, or are simply spurred by a flight to quality and the desire to have a "solid investment in one of the best ZIP codes." Coming up for ETCO are projects in Marina del Rey, where it's building 67 loft-style condos on Glencoe Avenue; DTLA's Little Tokyo (66 units in a mid-rise building on Astronaut Onizuka Street); and Pacific Palisades, where it recently purchased property to build 53 luxury condos with ocean views.
SALES
Riverside Warehouse Partners sold a 211k SF industrial building (797 and 799 Palmyrita Ave) in Riverside's Hunter Park submarket for $14M--or just over $66/SF--and leased it back for eight years. Lee & Associates' Rocky Moran, who repped the seller along with Herrick Johnson, says the deal allows the company to cash out and exchange into a new property while continuing to operate in the building, which was originally built for it. Lee's Jeff Smith and Ryan Lal repped the buyer, an investor.
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A private investor bought three multifamily properties totaling 85 units for $13.4M in separate off-market transactions. The properties include the 34-unit Strohm Apartments, 5636 Strohm Ave in North Hollywood (above); the 30-unit Ratner Apartments, 10930 Ratner St in Sun Valley; and the 21-unit Hollywood Way Apartments, 7601 N Hollywood Way in Burbank. The buyer used the proceeds from two recent sales to increase and upgrade his portfolio, according to Warren Berzack of Lee & Associates-LA North/Ventura, who repped the buyer and sellers along with Stephen Geiger, Jim Fisher and Mike Smith.
LEASES
7-Eleven Corp plans to relocate a regional warehouse and distribution center from Orange County to Santa Fe Springs under a long-term lease it signed with the Carson Cos. The company will occupy more than 146k SF at 12330 Lakeland Rd, or nearly half of the building, and install 35k SF of cooler space to serve 7-Eleven stores throughout LA with dairy and meat products, sandwiches and baked goods. The seven-year lease is valued at $7.4M. Colliers' Chuck Wilson and Jon Thys repped 7-Eleven, while CBRE’s Rick McGeagh repped Carson.
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Big 5 Corp signed a 65-month pre-lease with KB Development for a 171k SF spec building under construction at 6150 Sycamore Canyon Blvd in Riverside. Completion is slated for April. Lee & Associates' R. Mario Calvillo and Finn Comer repped KB, which has built more than 10M SF in the IE. Ogburn & Associates' Charles Ogburn repped Big 5. The lease includes four five-year renewal options. The HPA-designed building will offer 32-foot clear height, a 185-foot concrete truck court and parking area, and 21 dock-high doors. Fullmer Construction is the builder.
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JLL signed a post-production, visual effects and production company to nearly 16k SF at 900 N Cahuenga Blvd, a former Time Warner call center that's being redeveloped into a creative office campus. Along with fashion company Vince, a 28k SF tenant signed a month and a half ago, the lease brings the Hollywood Media District project to full lease-up. Both tenants are scheduled to occupy their spaces by early '15. JLL's Nicole Mihalka and Mike Fowler repped building owners Birch Tree Properties and Metric Holdings.
FINANCINGS
George Smith Partners arranged $17.5M in financing on behalf of Highpoint Capital Group for the acquisition and renovation of three retail centers in Fresno and Clovis totaling more than 280k SF. Steve Bram, who arranged the financing with Allison Higgins, says the centers boast prime locations but at 65% leased are below the area's average occupancy. Planned renovations, some of which are underway, include new facades and the installation of drought-resistant landscaping and high-tech drip irrigation systems to reduce the properties' water use.
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Venture West Funding's Matt Douglas and Jean-Marc Herrouin arranged a $5.4M loan for the refi take-out of a $4.5M construction loan on a 52-unit apartment building in Midland, TX, managed by Capstone Real Estate Services. The pair arranged the non-recourse financing through Berkadia Commercial Mortgage to Freddie Mac.
CONSTRUCTION
Bernards recently completed the $110M One Santa Fe transit-oriented complex in DTLA's Arts District, but the firm isn't done yet. The company's now under construction on two mixed-use multifamily projects in South Park for The Wolff Co: Grand and 12th (1200 S Grand Ave), which consists of 347 units and 19k SF of ground-floor retail and amenities; and Olive at Pico, consisting of 293 units with more than 17k SF of ground-floor retail and 7k SF of amenity space. They're slated for completion at the end of 2016 and mid-2016, respectively. Both projects were designed by TCA Architects.
EXECUTIVE NEWS
Martin Caverly, who led the restructuring of EVOQ Properties, has joined Philadelphia-based Resource Real Estate as an SVP focused on creative office efforts. He'll be based in the LA office of the firm, which specializes in direct real estate investments, commercial real estate lending and global real estate securities. As CEO of EVOQ, Martin (snapped at Bisnow's Evolution of Downtown last year) spearheaded the redevelopment of Alameda Square into a creative office hub. Previous stints were with O’Connor Capital Partners, Security Capital Group and Tishman Speyer, where he served as head of European acquisitions.
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JLL VP Matt Berres joined the firm's Southwest Capital Markets team in DTLA, transferring from the Chicago HQ. He'll focus on the expansion of single-tenant net lease transaction services, including sale-leasebacks, build-to-suits and net lease investment sales, partnering with managing directors Rob Bickel, Bob Dmytryk and Michael Hochanadel. In addition, Lorena Tomb joined JLL as a VP of retail brokerage in LA, where she'll develop leasing strategies for the firm's retail investor clients.
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NAI Capital VP Kevin Kawaoka was appointed 2015 president of the CCIM LA chapter's board of directors. He specializes in multifamily sales throughout Greater LA, working out of NAI's West LA office. The chapter's priorities this year include collaboration with real estate attorneys, wealth managers and energy efficiency agencies to offer intensive courses on commercial real estate, market and investment decision analysis.
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Steve Jaffe was promoted to chief investment officer and principal of BH Properties. In his 11 years with the company, including his previous roles as EVP and chief counsel, he's been closely involved in the firm's acquisition strategy of buying and repositioning distressed properties (office, retail, industrial and multifamily) in the Southwest. Steve currently serves as president of City of Hope’s LA Real Estate & Construction Industries Council.
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Charles Dunn Co named Ashley Saye as an associate in the Century City office, where she's focused on the sale of net leased, single-tenant retail properties in LA and Orange counties. She began her career working in sales for tech startups.
