This Week's LA Deal Sheet
If you tour one of the units at Alliance Residential's new Broadstone Candara, you might be shocked by some of the extras, such as a doorbell that plays Spanish guitar music.
The MP3 doorbells play a different song depending on the unit's finish package, Alliance development/acquisition director Michael Wilborn (center, with LA City Council member Tom LaBonge at left) told us yesterday. It's one of the company's "tickles"—something unique that creates memory retention for future residents. The 103-unit luxury apartment community just opened in the Hancock Park area (738 Wilcox Ave), between Larchmont Village and the Wilshire Country Club. It's about 30% leased to professionals, studio and entertainment execs (it's close to Paramount Studios), couples and downsizing empty nesters.
The project sports a Spanish Colonial Revival exterior by Santa Monica-based DFH Architects. H Hendy Associates designed the common area interiors, with Ariel Fox Design responsible for the residence interiors. Alliance likes to model its properties after boutique hotels, Michael says, noting the project boasts five distinct outdoor spaces. The company also likes to brand its amenities, so instead of a dog-washing station you've got the Puppy Parlor. Other spaces include the Lion's Den lounge; the Study, a workspace with full presentation and conferencing capabilities; and the Enchanted Fig, an indoor entertaining bar with TV and WiFi.
Broadstone Candara was a ground-up redevelopment project. Alliance acquired the nine parcels, occupied by old single-family homes and small multifamily dwellings, from a single seller for about $80k/unit. Next month, the company will launch construction on the 348-unit Broadstone Laguna Niguel in South OC. Also in the hopper: a 144-unit project in LA's Fairfax District starting construction in mid-2015. In addition, Alliance is wrapping up three projects: the 122-unit Sway, a Broadstone Community, which opens in April at Fifth and Broadway in Santa Monica; the 100-unit Broadstone Balboa Park; and 360-unit Broadstone Corsair. The latter two, both in San Diego, will be completed in April and May, respectively.
SALES
Hudson Pacific Properties completed the sale of its 227k SF First Financial Plaza office property in Encino (16830 Ventura Blvd) to Douglas Emmett for $89M or $392/SF. The REIT intends to put the net proceeds (about $46M) toward its previously announced purchase of Equity Office Properties’ San Francisco Peninsula and Silicon Valley portfolio, consisting of 26 office buildings and two land parcels, from Blackstone Real Estate Partners V and VI for $3.5B in stock and cash.
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A Hillstreet Realty affiliate sold a 71-unit multifamily property, 5700 W Olympic Blvd in LA's Miracle Mile area, to a private investor for just under $23.6M or more than $331k/unit.
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Rosano Partners completed the sale of a three-building multifamily property in North Hollywood (11135 Burbank Blvd) that will be redeveloped into a four-story, 70-room boutique hotel. The project will break ground in Q4 and feature a variety of amenities, including a pool area and dedicated rooms to showcase the work of local artists. VP and development specialist Mariela Iamburg repped Dennis Scheer and Thomas Enslin, sellers of one of the properties, as well as 11135 Burbank Blvd RG LLC, owner of an additional parcel previously assembled by Rosano Partners as part of the offering. Lux Realty repped the buyer.
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Overton Moore Properties sold a new 238k SF logistics facility the company developed as a build-to-suit for a major electronic parts distributor. The facility's located in Pomona at 2205 Mt Vernon Ave, and includes 30k SF of office space. Colliers International’s Tom Taylor and Steve Bellitti repped OMP in the $23.4M transaction. Colliers' Phil Norton repped the buyer along with Newmark Grubb Knight Frank’s Rick Sheckter.
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Kearta LLC bought an 18k SF flex/industrial building in Van Nuys (6855 Hayvenhurst Ave) for a price exceeding $200/SF. The building, located next to Van Nuys Airport, will be occupied by ColorNet Press, a commercial printing company that's relocating and expanding from Santa Monica. NAI Capital's David Young and Chad Gahr repped the seller, a private investor.
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De Wan Management Group bought a brand-new high cube concrete tilt-up warehouse and corporate facility in Pico Rivera (8800 E Slauson Ave) for $4.6M or $150/SF. The building contains nearly 31k SF on a corner location. Lee & Associates' Peter Bacci and Jack Cline repped the seller, Slauson Industrial Investors, while interPres Commercial Realty's Peter Pistone repped the buyer.
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Hanley Investment Group set new cap rate records on two single-tenant NNN ground lease sales in Riverside and Orange counties. A 6k SF Chase Bank building in Temecula (26411 Ynez Rd) traded for $4.5M, representing a cap rate just under 4%. This is the lowest cap rate nationwide for a single-tenant net-leased bank with a primary term of less than 10 years remaining, according to Jon Selznick, who repped the seller along with Pat Kent. Hanley's Jeremy McChesney repped the buyer. Jon also repped the seller of a 4.4k SF Chase Bank in Laguna Hills (24799 Alicia Parkway) for $4.5M. He says the 3.84% cap rate was the lowest for a brand-new Chase Bank ground lease in the US in recent years. CBRE's Art Flores and Brian Cole repped the buyer.
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The Rio Co bought the 20-unit San Antonio Apartments (1090 E San Antonio Dr) in the Bixby Knolls area of Long Beach from the Alray Trust for just under $3M. Stepp Commercial's Robert Stepp and Michael Toveg repped both sides. Built in 1948, the property consists of a pair of two-story buildings and a building that includes 11 one-car garages on half an acre. The new owner plans to launch a full-scale reno of all the units, update the exterior, and add a perimeter fence to turn the large front yard into usable outdoor space.
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In an expansion, Morgan Fabrics bought a 28k SF industrial building in Vernon (4201 Charter St) for $3.4M. Heger Industrial's Jon Reno and Trevor Gale represented the buyer, a global supplier to the home furnishings and hospitality industries.
LEASES
NSB Associates landed Kite Pharma as a tenant in its Utah Avenue Campus, a two-building creative office redo in El Segundo. Kite's new R&D facility will occupy an entire building containing more than 43k SF at 2355 Utah Ave, expanding from Santa Monica. JLL's Mike McRoskey, Frank Scott, Blake Searles and Evan Moran repped the landlord, which acquired the former Xerox facility in 2008. CBRE repped the tenant.
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Shogun Japanese Restaurant signed a 10-year lease on the former Elephant Bar & Grill building in San Bernardino (1050 E Harriman Pl). The restaurant is projected to open this summer in The Hub shopping center. Progressive Real Estate Partners' Paul Galmarini and Kenia Drugan repped both sides.
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After 40 years of working in the South Tower of Century Plaza Towers, Cox, Castle & Nicholson moved its LA HQ into new state-of-the-art offices in the North Tower (2029 Century Park East). Mario Camara, the office's managing partner, says the new digs provide enhanced collaborative meeting space and advanced technology, including high-speed connectivity between the firm’s three offices and their clients, in a smaller footprint. It also gives the firm a cool place to celebrate being named “Law Firm of the Year” for Land Use and Zoning Law for 2015 by U.S. News & World Report and Best Lawyers. Kudos!
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O'Neill Logistics, a third-party logistics firm, inked a 288k SF industrial lease with Westcore Properties at Hathaway Industrial Park in Santa Fe Springs. The Mid-Counties market has seen an influx of tenants from the South Bay looking for better values as rental rates rise, according to JLL's Luke McDaniel, who repped the landlord with colleagues Cameron Driscoll and Zac Sakowski. CRESA repped the tenant.
FINANCINGS
George Smith Partners arranged $21M on behalf of Elite Real Estate LLC, for the ground-up construction of a 49-unit apartment project in Brentwood (11965–11973 Montana Ave). According to GSP SVP Jonathan Lee, the luxury community will be one of the largest multifamily projects built in the Brentwood neighborhood in the past decade, totaling more than 80k SF of living space. Analyst Adam Candler assisted in the financing, secured for 30 months at LIBOR plus 2.5% with recourse limited to the top 50% of the loan amount.
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Douglas Emmett closed a non-recourse $102M loan fixed at 2.84% for five years, due on April 1, 2025. The loan's secured by the recently acquired Waena Apartments, a 468-unit multifamily community in Honolulu.
CONSTRUCTION/DEVELOPMENT
Frank Gehry will design a new mixed-use development on the Sunset Strip for Townscape Partners, a real estate investment firm led by Tyler Siegel and John Irwin. Located at the Strip's eastern gateway at the border between East LA and West Hollywood, the project site (8150 Sunset Blvd, near the Chateau Marmont) is the historic site of the old Garden of Allah hotel, which was demolished in 1959. Initial plans for the project, consisting of 249 apartments with extensive open spaces and street-level restaurants and retail, will be released this spring. San Francisco-based Hart Howerton designed the master site plan in 2013. Last year, 8150 Sunset was designated as a California Environmental Leadership Development Project—the first in LA County—for projects that result in an investment in the state of more than $100M; create highly skilled, high-wage jobs; achieve a minimum of LEED Silver cert; and result in zero net additional emissions of greenhouse gases.
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Vancouver, Canada-based developer Onni Group unveiled LEVEL DTLA, a $200M, 33-story luxury apartment tower in LA's South Park district (888 S Olive St). The project contains more than 300 fully furnished residential suites with floor-to-ceiling windows, 40-50 inch flat-screen TVs and open-air balconies. The fourth-floor L Club features 37k SF of indoor/outdoor space, including a fitness center. The project, which opens this summer, also offers 5k SF of meeting space for private events.
