This Week's LA Deal Sheet
Ocean West Capital Partners has acquired 8942 Wilshire, an 83k SF office building that occupies a full block in Beverly Hills. The building was constructed in 1989 as the HQ of Columbia Savings & Loan, which famously imploded in the late-'80s-early '90s S&L crisis.
The real estate investment, operations and management firm purchased the vacant building from lender and special servicer LNR. VP Will Lee tells us Ocean West is in the process of completing a repositioning plan that will include a large rear private patio and garden, lobby upgrades, and a newly renovated front courtyard for outdoor collaboration and meetings. Attributes such as high ceilings, open floor plans, floor-to-ceiling windows and skylights, and above-standard 6/1,000 parking ratio in the subterranean garage make the building ideal for a creative user looking for a Beverly Hills home, he says. The postmodern-style building was designed by renowned architect Richard Keating, then at SOM. According to the LA Conservancy, the building is notable for its "floating" front façade of limestone, supported by a partially exposed, copper-clad structural frame.
The newly renovated entry courtyard features a sculpture by famed artist Eric Orr. After the Columbia Savings debacle, the building was purchased by a partnership of Alan Casden and Cerberus Capital Management, and foreclosed in 2012 in the wake of a partnership dispute. Although the property has remained completely vacant, it previously has been home to high-profile tenants like International Creative Management and Fox Interactive. Built for a then-princely $55M (these were the "go-go '80s," after all), 8942 Wilshire boasts exceptional finishes and still retains its class and iconic stature after all these years, Will notes. The original owner "didn't skimp on anything." (Not even junk bonds.) He says Ocean West, which has acquired over $500M of assets and managed over 3M SF of commercial properties in SoCal since its formation in 2010, is excited to reintroduce the property back to the market. LA Realty Partners will handle leasing.
SALES
Lincoln Property Co and Angelo, Gordon & Co sold 800 Wilshire, a 16-story, 227k SF office building in DTLA's Financial District, to Vancouver-based Onni Group following a multi-year repositioning. The JV partners acquired the property in 2013 and launched a spate of improvements to attract creative users and new ground-floor retailers. The work included a lobby renovation and implementation of an open ceiling model; offices on the second and 16th floors feature outdoor balconies. Occupancy has jumped to 95% from 65%, including tech-driven tenants such as Cross Campus. The building was constructed in 1972 and previously renovated in 2004. 800 Wilshire attracted capital from around the world, according to Cushman & Wakefield's Marc Renard, who repped the parties.
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Chateau Winnetka, an 18-unit apartment complex, changed hands for just over $4.5M, marking the highest price per unit in the Winnetka area. At a 4.9% cap, the property sold with an aggressive price in a primarily one-bedroom complex, according to CBRE's Melinda Russell, who repped seller Winnetka Partners LLC. The seller bought the property a year ago and fully rehabbed each unit, including granite countertops, stainless steel appliances and custom window shutters. Chateau Winnetka serves as a more affordable alternative to the adjacent Warner Center market, she adds.
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Premier Automotive Group of New Orleans bought seven acres in Claremont for the development of a new Chrysler, Dodge, Jeep and Ram auto dealership. Jodi Meade, practice leader of Avison Young's automotive properties group, repped the buyer as well as seller Brandywine Homes. The property (620 Auto Center Dr), part of the Claremont Auto Center, has been vacant for more than a decade. Brandywine acquired an 11.4-acre site for residential development in 2013 but couldn't get rezoning approved. (Jodi's currently marketing the remaining 4.4 acres to other dealers.) According to Claremont City manager Tony Ramos, the new dealership will add 125 new jobs, bring in sales tax revenue and revitalize the auto center. Existing structures on the site will be demolished, making way for a flagship 65k SF sales and service center to begin construction by year-end. Completion: next summer.
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A 10-unit apartment property in Santa Monica (2250 30th St, on the corner with Pico) sold for $2M with a closing cap rate of 3.6%. According to Stepp Commercial's Kimberly Roberts Stepp, who repped both the buyer and seller, the property offers a 98% potential upside in rents. Constructed in 1956, the building is commercially zoned with a low per-unit cost for the neighborhood. The buyer is planning a complete renovation and repositioning to capitalize on long-term appreciation.
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The Thomas & Carol Hoppock Family Trust, a 1031 exchange investor, bought a four-tenant industrial property in Santa Fe Springs (10751-10759 Forest St) as a leased investment for $2.9M. Heger Industrial's Trevor Gale and Jon Reno repped the buyer, while Penta Pacific's Douglas Wells repped seller Oakforest Property LLC.
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An eight-unit apartment building in the North Hollywood Arts District (11281 Huston St) traded to a Russian investor for just under $3.7M. The property was completed this year and is fully occupied. Dario Svidler of Partners Trust repped the seller, Bakman Huston LLC.
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A 44-unit multifamily property in the Valley Glen neighborhood of Van Nuys (5914 Buffalo Ave) sold for nearly $8.5M. Built in 1963, the property consists of two buildings on more than one acre of land, with dual frontage on Buffalo Avenue and Califa Street. This marks the largest multifamily transaction in Valley Glen in nine years, according to Marcus & Millichap's Rick Raymundo, who repped both sides. The buyer agreed to an extended, six-month escrow period to accommodate the seller’s 1031 exchange.
LEASING
Cambro Manufacturing Inc signed a 318k SF early lease extension and expansion valued at $11.8M on an industrial facility in City of Industry (21558 Ferrero Pwy). Newmark Grubb Knight Frank's Wesley Hunnicutt and Matthew Moore repped the tenant, a food-service equipment and supply company that uses the facility to distribute goods manufactured at its Huntington Beach plant. The team also negotiated a significant allowance to make improvements like LED lighting upgrades and office space modifications. The deal includes the potential for Cambro to expand into 215k SF of an adjacent building in 2017, after the existing tenant's lease expires, amid rising rents and a tightening market for greater LA industrial space. Marc Selznick of Unire Real Estate repped landlord Prudential-Grand Avenue Venture LLC.
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Baharinejad leased 1,200 SF in West LA (11658 Wilshire Blvd) for a Baskin-Robbins store. CBM's Roselene White repped landlord 7-Eleven.
FINANCE
CBRE Capital Markets' Sharon Kline and Marina Massari arranged a $6.8M refi for Crossroads Self-Storage, a 751-unit facility in Santa Maria (650 Parkway). The 10-year loan with 30-year amortization was originated by Aegon USA Realty Advisors LLC. The borrower, Westar Associates, developed the facility in 2003. The property is adjacent to Westar's Crossroads at Santa Maria, a 500k SF power center.
CONSTRUCTION/DEVELOPMENT
Bernards broke ground on a $110M, six-story patient tower for the Henry Mayo Newhall Hospital in Santa Clarita. The contractor is responsible for all aspects of the design-build project, teamed with primary design partner HMC Architects in the firms' fifth design-build project together. The 160k SF tower will connect to the existing 238-bed community hospital and trauma center. The expansion will initially add 112 private patient rooms and other hospital services, including an entire floor dedicated to obstetrics, as well as a new kitchen and dining areas. The tower's roof will provide a heliport for trauma services. Completion: May 2018. In addition, Bernards and JV partner Colombo Construction of Bakersfield are underway on the $90M, 25-bed Tehachapi Critical Care Replacement Hospital (above). When completed next year, it'll be the only healthcare facility in this rural area of Kern County. Designed by SWA Architects, the 78k SF critical access hospital will offer all healthcare services provided by a large hospital, though on a smaller scale.
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Holland Partner Group held a grand opening and ribbon-cutting ceremony for The Brand, a mixed-use luxury apartment community in Glendale (120 W Wilson Ave). With 401 units, the complex won't be nearly as cramped as the City of Glendale and Holland Partner officials crowded into this photo.
Offering a range from studios to three-bedroom units, The Brand was designed to attract urbanists and creative professionals seeking to live near restaurants, nightlife, parks and cultural offerings. The LEED Silver-targeted project boasts a green roof, bike parking, indoor and outdoor movie theaters, a 24-hour FLEX Fitness Center, various types of lounges and a wine cellar. Retailers slated to open in January include Tender Greens, Chipotle and PizzaRev.
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Forestar Toscana Development Co, a JV between Foremost Cos and an affiliate of Starwood Capital Group, launched construction on Terramor, a 1,443-home master planned community in Corona. Located on one of the largest remaining parcels for residential development on the Interstate 15 corridor, the multi-generational community is aimed at both age-qualified and market-rate buyers.
According to the developers, Terramor addresses regional housing demand among 55-and-up buyers seeking a right-sized home and active lifestyle, as well as families looking for a resort-like community atmosphere in a natural setting. Sustainability measures will include drought-resistant landscaping, preservation of riparian habitats, and 540 acres of permanent open space. Delivery of blue-topped lots to builders is anticipated in Q3 2016; sales are expected to begin in Q1 2017.
