This Week's LA Deal Sheet

One of California's most venerable commercial brokerage firms, DAUM Commercial Real Estate Services, has opened a Mid-Counties office in Cerritos (12750 Center Court Dr) spearheaded by veteran brokers Casey Mungo, Charles Johnson and Sam Chu. This gives DAUM nine LA-area offices and 10 overall.

Those with long memories might recall DAUM once had a Mid-Counties office on the 5 Freeway at Valley View in La Mirada, which it opened in the 1970s. Through a series of mergers, including DAUM's acquisition of Business Properties Brokerage Co, the firm closed the La Mirada location and consolidated it with an office in Anaheim. When the 2008 downturn hit, the Anaheim office was merged into DAUM's Newport Beach office. "That left us with a gap in our coverage," CEO Michael Nubel told us. The firm continued to serve its strong Mid-Counties client base from offices in the City of Industry, South Bay and Newport Beach, he says, but the area is too big not to have an office presence there. "Now is a good time, with a fully recovered and vibrant market, to re-establish an office in that market."

Indeed, Sam, who joins DAUM as a first VP, tells us low interest rates and lack of inventory are driving the Mid-Counties sales market to its highest point ever, with record sales this year on both the user and investment sides. Lack of Class-A industrial product is also causing an uptrend in rental rates. Sam notes Mid-Counties has always been a great market for tenants seeking modern functional buildings. In addition, he's seeing a migration of tenants from the South Bay. "Prices are a little more competitive in our market," he says. Sam spent the last 22 years at CBRE and has sold or leased over 21M SF with a total transaction value of nearly $1B. He joins DAUM EVPs Casey Mungo, who was the firm's top agent in 2014, and Charles Johnson from the South Bay and City of Industry offices, respectively.

SALES

CBRE sold Carmenita Corporate Plaza, a three-story, single-tenant office building in Cerritos (13340 183rd St), on behalf of a Cohen Asset Management affiliate for $19.7M. The buyer is a private exchange investor. Fully occupied by Infinity Property & Casualty Corp, a provider of specialized auto insurance programs, the building contains more than 68k SF and features signage as well as 91 Freeway frontage. Kevin Shannon, Paul Jones and Blake Bokosky repped the seller.

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Optimus Properties acquired a 71-unit apartment complex in Hollywood (1025 N Serrano Ave) from a private real estate company for just under $10M. The building was built in 1927. Although the seller spent $400k to upgrade the property, the new owners say they plan to perform higher grade improvements as the market merits, renovating interior units as they become available and upgrading the lobby area and common areas while retaining the property's old-world charm.

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A JV of TRG Investments and Cresta Properties bought The Ashby, a 49-unit apartment building in Koreatown (808 S Hobart Blvd) from Virtu Investments for nearly $8.4M. The new owners plan to complete a renovation program started by the previous owner, including an upgrade of the lobby and common areas and a period-specific re-facing of the building exterior. A lounge, fitness center, dog park and outdoor living space also will be added. Pointing to an influx of young professionals, Cresta and TRG partners Reuben Robin and Avy Azeroual note Koreatown is becoming one of LA's most vibrant urban markets. The two Beverly Hills-based investment firms own more than 1,000 multifamily units in SoCal, including 300 units in Koreatown. To win The Ashby against a dozen competing bids, the buyers offered a non-refundable deposit from day one with a seven-day due diligence period. Colliers International's Kitty Wallace and David O’Neil repped both the buyer and seller. Concord Real Estate Services will manage the property and oversee the capital improvement program.

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Echo Park Villas, a 32-unit multifamily property composed of 10 Mediterranean-inspired buildings at 1416 Echo Park Ave, traded for $7.2M. According to Sperry Van Ness' Brian Heller, who repped buyer Echo Park TPIII LLC along with Dan Baird and Michael Chang, this is the highest multifamily sale in the 90026 ZIP code this year. Located on a 16k-plus SF corner lot, the gated complex was built in phases from 1908 to 1930; the unit mix ranges from bachelors to three-bedrooms, and some units boast city views. The new owners plan to upgrade and modernize the unit interiors and common areas, while maintaining the property's charm and architecture. Vince and Melina Kalachian of Coldwell Banker Commercial repped the seller.

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Sares Regis Multifamily Value-Add Fund II LP bought Vista Pointe, a 216-unit multifamily complex in Covina (1400 and 1420 1/2 N Grand Ave) from an out-of-state buyer. Berkadia's Margie Molloy in the Inland Empire office and Adrienne Barr and Robin Ossenbeck in the West LA office teamed up to broker the sale. The property was 95% occupied at the time of sale.

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A vacant, two-building office property in LA (1616 Beverly Blvd and 118 Union Pl) changed hands for $4M cash. Charles Dunn Co's John Anthony, Chris Steck and Chris Giordano repped the seller, an LLC. Regional Realty & Investment repped the San Diego-based buyer, Thomas Leslie Cantor, who plans to use the property for medical office use. The property sits on nearly half an acre and includes a surface parking lot.

LEASES

The Phelps Group, an integrated marketing company, leased 30k SF of office in Playa Vista to relocate its HQ from Santa Monica. The long-term lease at 12121 Bluff Creek is valued at $16M. The company, which  provides integrated messaging and media campaigns for brands in a number of categories, will move to the white-hot tech and advertising corridor in Q1 '16. Lee & Associates West LA's Patrick Ayau and Andrew Wilson repped the tenant. Mike Geller of First Property and Patrick Foudy and David Saeta of IDS repped the landlord, Horizon PH1 Office Holdings, an entity of JP Morgan Asset Management.

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Giant Bicycle Inc signed a new lease for more than 203k SF of industrial space in La Mirada (15500 Phoebe Ave) for its West Coast distribution center. JLL's Luke McDaniel and Cameron Driscoll repped the tenant, which previously occupied 106k SF in Cerritos. The brokers say the new building provides proximity to the ports of LA and nearby transportation corridors, but finding it was a challenge because Mid-Counties is one of the tightest industrial submarkets in the US. The landlord, Oltmans Real Estate Services, was repped by INCO Commercial Brokerage.

FINANCING

Turner Impact Capital and Agassi Ventures launched Turner-Agassi Charter Schools Facilities Fund II, with plans to invest up to $1B to develop as many as 130 schools in high-need areas nationwide by 2020. The new fund will build on the success of the first fund, which has developed and delivered 50 schools for best-in-class charter school operators throughout the US since 2011, with an additional 15 schools slated to open for the 2015 and 2016 school years. Investors in Turner-Agassi II include the University of Michigan, the Texas General Land Office, Citi Community Capital, institutional investors, family foundations and, for the first time, qualified high-net-worth individuals. Like its predecessor, the new fund will take the lead on school site selection and acquisition, as well as design and construction. Facilities will be leased at affordable rates to school operators, who can purchase the schools once they reach full occupancy. Turner-Agassi II will help operators obtain permanent financing using New Market Tax Credits, tax-exempt bond offerings, traditional bank financings, or funding from the US Treasury’s Community Development Financial Institutions Fund.

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Sonnenblick-Eichner Co's Elliot Eichner and Patrick Brown arranged $153M of 10-year fixed rate, first mortgage financing for a portfolio of 10 ocean-front hotels totaling 739 rooms. The refi loans were non-recourse and are not cross-collateralized, and most are full-term IO. The properties include the Fireside Inn on Moonstone Beach, FogCatcher Inn and Pelican Inn & Suites in Cambria; Cottage Inn by the Sea and Spyglass Inn in Pismo Beach; Inn at Venice Beach in Venice; Inn at Marina del Rey in Marina del Rey; The Belamar Hotel in Manhattan Beach; and Hilton Garden Inn at PGA Village in Port St. Lucie, FL.

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RED Capital Group's Donald Frankman and Lee Harris closed the firm's first loan under Freddie Mac's Small Balance Loan initiative. The firm funded a $1.3M refi of 1326 McCadden Apartments in LA, an eight-unit, garden-style apartment building. Launched last October, the SBL program targets small property loans of $1M to $5M, with at least five apartment units.

CONSTRUCTION/DEVELOPMENT

C.W. Driver completed construction on the $110M, 100k SF Life Sciences building at Loyola Marymount University in LA. Construction on the project began in June 2013. Desgigned by CO Architects, the new Life Sciences building houses faculty and research staff in biology, chemistry and biochemistry, health and human sciences, civil engineering, and environmental science at the Seaver College of Science and Engineering. According to project manager Matthew Wilt, the construction process entailed a variety of technologies and innovative processes that allowed C.W. Driver to order materials with long lead times and coordinate the pre-fabrication of systems like the plumbing racks off-site.

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Metro @ Compton Senior Apartments, a 75-unit, transit-oriented, affordable housing development, opened at 302 N Tamarind Ave in Compton. Meta Housing Corp developed the $20.3M project in partnership with Western Community Housing. The apartments are directly across from Compton's new Senior Activity Center and walking distance to the Metro Blue Line light rail and bus station. The Green Point Rated project boasts photovoltaic and gray water systems. Metro @ Compton was designed by Y&M Architects and built by Optimus Construction, with KKG serving as construction manager. WSH Management manages the new community.

Bernards completed construction on Phase 2 of Playa Del Oro, a 260-unit addition to the 405-unit existing residential mixed-use complex. Located at Manchester Avenue and Lincoln Boulevard in Westchester—Silicon Beach's southern gateway—the Playa del Oro complex was designed by Van Tilburg, Banvard & Soderbergh and developed by Decron Properties. Connecting to the existing structure built in 2009, the latest phase is a concrete, podium-style structure with 235 units above the podium slab and 25 units at street level along with 5k SF of retail space. New lifestyle-enhancing amenities also were added as part of the second phase, including a sky lounge, Fitness on Demand, Video Game Lounge, Resident Café, and a landscaped courtyard with outdoor living areas and barbecue.

PROPERTY MANAGEMENT

Centers Business Management walked away with a high-profile assignment: the property management account for the 7,500 SF Converse Store on the Third Street Promenade in Santa Monica. The single-tenant street retail property (1437 Third St) opened in January 2012 as Converse's first consumer direct retail store on the West Coast. Although many tenants who occupy single-tenant properties self-manage upkeep and general maintenance, CBM president Rick Rivera tells us this isn't always the case. And even though tenants are responsible for taxes and insurance under the terms of triple-net leases, he adds, the landlord is still responsible for paying those bills. It’s important to have a management company following up with tenants on their responsibilities, ensuring they reimburse the landlord for those expenses, Rick says. CBM's Pamela Ozell has been picked to handle the Converse account.