This Week's LA Deal Sheet
The RedBuilding in West Hollywood, the third and final building in the iconic Pacific Design Center, signed four long-term leases totaling over 65k SF. Owner and developer Charles S. Cohen tells Bisnow the deals reflect a diverse group of high-identity tenants who'll create a synergistic environment, allowing them to do their best work in a highly creative atmosphere. The new tenants include Whalerock Industries, a media/tech company owned by entertainment exec Lloyd Braun, relocating from Santa Monica; Gaumont International Television, part of European-based studio Gaumont; the US HQ of global clothing retailer AllSaints, which is moving from New York; and Criteria Corp, a provider of web-based pre-employment testing services.
We were there when the striking, Cesar Pelli-designed building was topped off in 2011. These are the first leases for the RedBuilding, which received its CO in early 2013, though Charles moved his offices there over a year ago. He says the tenants that sign at the building are looking for a signature identity and not every tenant is right. "Committing to a lease in the RedBuilding is not only an investment by us, it’s also an investment by the tenants, too." Construction will begin on the new offices later this year. According to Charles, starting rents are $4.50 and up, net of energy costs.
While one of the tenants is coming from Santa Monica, Charles believes this is a matter of the building's quality rather than location outside of pricey SaMo. The tenant brokers included First Property Realty Corp's Gayle Landes and Mike Geller (Whalerock), Newmark Grubb Knight Frank's Greg Frankovich (Gaumont), Maddox Retail's Arian Ahmadian and Bridge Real Estate's Brian Abdi (AllSaints) and Savills Studley's Michael Shuken (Criteria). The landlord was represented in-house by Marc Horowitz and Jeff Lasky. Scott Panzer with JLL in NYC and Josh Wrobel, Brian Nehaus and Jaclyn Ward in LA have been appointed the RedBuilding's exclusive office leasing agents.
SALES
Rexford Industrial bought the former Topco Sales building, a 154k SF distribution building in Chatsworth (9401 De Soto Ave). The building was the former corporate HQ, manufacturing and distribution center of the company, a leader in the manufacturing of adult novelty toys. The sellers were the original owners of the business, which moved to smaller quarters in Simi Valley. NAI Capital's Chad Gahr and David Young repped both sides. No vestiges of the building's racy past remain, but Chad says the building's 28-foot clear height makes it one of the more functional distribution buildings in the SF Valley. Rexford plans extensive upgrades to the property and appointed Chad and David to market the building for lease. The high-visibility building boasts 700 lineal feet of frontage along De Soto, Chad notes.
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Hanley Investment Group sold two value-add shopping centers in separate transactions totaling nearly $27M. A 1031 exchange buyer purchased the 85% leased Vineyard Plaza (above), a 64k SF center in Oxnard (2311-2385 N Oxnard Blvd), for $17.6M. Ed Hanley, Bill Asher and Kevin Fryman repped the seller, while Coldwell Banker Commercial NRT's Nick Borrelli repped the buyer. Ed and Bill repped both sides in the sale of Palmdale Promenade, a 96k SF center in Palmdale (412-442 W Rancho Vista Blvd) for nearly $9.3M. According to Kevin, properties like these have become attractive alternatives for private investors seeking better returns outside the City of LA with nontraditional grocery anchors or even no major anchors at all.
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Glendora Park Place Apartments, a mixed-use property in Glendora, traded to an out-of-state buyer for $14.5M. Located at the northeast corner of Forestdale Avenue and Route 66 near the future Glendora Metro Gold Line Station, the property consists of 50 apartments and 7,919 SF of retail. Sperry Commercial Real Estate's Frank Dinari repped the buyer, while Berkadia Real Estate Advisors' Peter Hauser repped the seller.
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For the third time in less than a decade, Madison Partners arranged the sale of the Orange Towers Apartments, a five-story, 36-unit complex in Hollywood (1757 N Orange Dr), directly across from the Dolby Theatre, TCL Chinese Theatre and Hollywood & Highland. The property changed hands for $10.4M in the most recent transaction. Listing broker Darin Beebower repped both the buyer, 6401 Wilshire Boulevard LLC, a local private investor, and seller Lion Orange LLC, an LA-based investment company. He notes the buyer, which owns additional properties on the block, will benefit from management consolidation and unit diversification in leasing.
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Vancouver, BC-based Pacific Reach Properties acquired Blu Beverly Hills, a 37-unit, 11-story luxury high-rise apartment building in Beverly Hills (8601 Wilshire Blvd), in a reverse 1031 exchange. The tallest multifamily building in the city, Blu Beverly Hills' one- and two-bedroom units range from 786 to 1,253 SF. The building also includes 650 SF of ground-level retail. Sklar Kirsh's Andrew Kirsh, Mark Nicoletti and Michael Floryan advised Pacific Reach on the purchase, financing and complex exchange transaction.
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Latitude 33 LLC, a San Diego-based private investment firm, bought the 121-unit Whispering Palms apartment complex in Palm Springs (449 E Arenas Rd) for $6.8M. Lee & Associates Palm Desert's Milburn Stevens repped the buyer, which plans a major renovation, as well as the seller, Metropolitan Management Co and City Center Real Estate. The deal was a land lease that took six months to close, Milburn says.
LEASES
The Human Services Agency of Ventura County leased more than 57k SF at Younan Executive Center, 2900 Madera Rd in Simi Valley, bringing the office building to 100% leased. Lee & Associates-LA North/Ventura's Mark Leonard, Cory Richmond and Jared Smits repped Younan Properties. Ventura County's Real Estate Services Division manager Keith Filegar repped the tenant. The transaction, believed to be Ventura County's largest office lease this year, allows the consolidation of a number of departments under one roof. Younan Properties acquired the two-story building, which contains more than 63k SF, last year with zero occupancy.
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FilmTrack, which provides contract and rights management services to the media and entertainment industries, leased 15k SF at 12001 Ventura Place in Studio City for the relocation and expansion of its HQ. Cresa's Brian Davies and Dave Toomey repped the tenant, while CBRE's David Solomon and John La Spada repped the landlord, American Realty Advisors. This brings the 72k SF building to 98% leased.
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Bay Cities Container Corp renewed its 94k SF industrial lease in Pacific Gateway Business Park (5138 Industry Ave in Pico Rivera) in a 10-year deal valued at $6.5M. The employee-owned manufacturer of retail packaging and point-of-purchase displays has been located at the property since 2005. Savills Studley's Bart Pucci, who repped the tenant, says the company will reconfigure some space to accommodate additional warehousing while looking for more space in the area. The landlord, Robertson Properties Group, was represented in-house.
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TeleSign leased the top two floors of MarinaView, a six-story office building in Marina del Rey (13274 Fiji Way). The tenant will relocate to its new space, containing over 21k SF, this summer from its current location a few miles away on Del Rey Avenue. Cresa's Dave Toomey and Brian Davies of Cresa Los Angeles repped the tenant. First Property Realty's Michael Geller repped landlord Kennedy Wilson, which acquired MarinaView in 2012 and launched a major interior and exterior renovation designed by Shubin + Donaldson Architects.
FINANCING
PCCP provided a senior construction loan to Hillwood Investment Properties for the development of a 1.1M SF Class-A industrial building on 50 acres in San Bernardino. The spec project anticipates completion by summer 2016. The property (southeast corner of East Orange Show Road and Waterman Avenue) is part of Hillwood’s 2,000-acre, master-planned AllianceCalifornia project, which includes nearly 9M SF of commercial and industrial space.
CONSTRUCTION/DEVELOPMENT
Christine Deschaine, SVP at Kennedy Wilson’s Brokerage Group, and EVP Lee Shapiro take a turn at the photo booth while celebrating the grand opening of Fifield and Century West Partners' Gibson Santa Monica. Christine is the project's retail leasing rep. The mixed-use project consists of 107 luxury residential units above ground-floor retail space with tenants like Caffe Primo and Sweat Yoga. The party was catered by local restaurants including The Misfit, Michael’s and Border Grill, and if that wasn’t enough, there was a "Mixologist" crafting custom cocktails on the roof deck to live music.
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LA-based Irongate broke ground on the second tower of The Ritz-Carlton Residences, Waikiki Beach and launched the final phase of sales at the luxury residential community. The final phase includes a collection of studio, one-, two- and three-bedroom residences priced from nearly $950k to $3.5M as well as a handful of penthouses priced from $6.75M to $25M. The first luxury towers to be built in Waikiki since 2009, the project consists of two towers connected at the base by a seven-story parking and amenity podium.
EXECUTIVE NEWS
Lynn Williams and Jeffrey Welch joined CBRE as vice chairman and EVP, respectively. Both come from Cushman & Wakefield, where Lynn was one of only a few women ever to be named a vice chairman. A former real estate attorney, she was a founding member of C&W's National Law Firm Practice Advisory Group and has completed more than 30M SF of real estate transactions and consulting assignments for law firms, corporations, financial institutions and professional firms over the past 30 years. Jeff, Lynn's partner for more than a decade, has completed more than 14M SF of leases in his career.
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CBRE promoted Mike Scimo and Henry Johnson to vice chairmen. The pair lead one of the firm's largest and most successful Global Corporate Services platforms, focused exclusively on optimizing the global real estate and facility portfolios of the Fortune 500. They joined CBRE in 2007 as part of the company's acquisition of Trammell Crow.
