This Week's LA Deal Sheet
By now you've heard Tustin Village Center was sold fully vacant and in rough shell condition to a private investor. Recently, Progressive Real Estate Partners president Brad Umansky gave Bisnow the dish on how the extremely rare OC value-add infill opportunity came about.
Brad, who marketed the 15k-plus SF property with Victor Buendia, a retail sales and leasing expert with Rancho Cucamonga-based PREP, tells us the seller and developer is a local Santa Ana family that's in the restaurant biz. The family bought a property (15761 Tustin Village Way) where a restaurant had burned down about eight years ago. Rather than rebuild the eatery, the family attempted to develop a multi-tenant retail center—potentially to include a new restaurant on a portion of the site. However, the project had some hair on it due to construction and title issues (and who wants to find hair in a restaurant?). This murky stew of challenges included cost overruns and construction liens filed on the property by previous contractors. "They actually were paid, but we had to find the contractors and get them to release those liens."
As a result, the family struggled to scrape together enough money to get the project into a condition where someone else could step in and finish it. Ultimately, the property sold for $3.1M cash in a 1031 exchange deal. The key was finding an entrepreneurial buyer who could serve as a developer, completing a project where the work was substantially done and leasing it up, as opposed to a passive investor. This narrowed the buyer pool. "Ironically, many developers would have preferred if it was just ground-up construction." CBRE's Dennis Zhang repped the buyer, a private investor in Alhambra.
SALES
Vista Investment Group sold 900 Seward St, a 40k SF best-in-class post-production space in the Hollywood Media District, to NYC-based Curo Enterprises for $19M or $471/SF. Madison Partners' Darin Beebower, Matt Case and Bob Safai brokered the transaction on behalf of the seller; the buyer represented itself. The two-story property boasts seven audio stages that are supported by a central machine room, edit bays, R&D rooms, administrative offices, kitchens and lounge areas. It's fully leased through February 2025 to Deluxe Entertainment Services Group, which provides services and technologies to the global digital media and entertainment industry.
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The Hoxton, an international lifestyle group, bought 1060 S Broadway for $30M with plans to redevelop the 89k SF building in DTLA's historic core as a boutique hotel. JLL's Mike Condon Jr. represented the seller, a private investment group. Built in 1922, the 10-story, Renaissance Revival edifice originally was known as the Los Angeles Transit Building. It's in the heart of Downtown’s adaptive reuse renaissance, surrounded by projects like the Proper and Ace hotels, as well as the Herald Examiner building.
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Dial "M" for...Millennial? citizenM, a multinational boutique hotel developer, bought a parcel measuring more than 12k SF at Hollywood and Vine for its first foray into the LA market. The $7.5M purchase from 1718 Vine St LLC works out to nearly $613/SF, a record price per SF for land in Hollywood. The location, adjacent to Capitol Records, is a perfect fit for the Amsterdam-based hotelier, which specializes in delivering "cool and stylish luxury micro-units targeting Millennial travelers in some of the hippest locations in the world," says Silver Commercial's Kay Sasatomi. She and Kathleen Silver, who notes citizenM would like to secure additional prime Westside locations, repped both sides. citizenM hotels are a combo of high design and high-tech—think high-speed touchscreen check-in and complimentary Samsung Galaxy tablets that control everything in the rooms.
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Reading International, an LA-based cinema and real estate development company, acquired two adjoining entertainment-themed retail centers in Australia for a combined $23M. The properties, which total 133k SF, include the Reading Cinemas-anchored Cannon Park City Centre and the Kingpin Bowling-anchored Cannon Park Discount Centre. They're in Townsville, the second-largest city in Queensland. Plans are to operate the two properties as a single entertainment-themed retail center, the company's fourth such property in Australia and New Zealand. According to chairman and interim CEO Ellen Cotter, the acquisitions are part of Reading's strategy to own the real estate underlying its cinema assets.
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A 53-unit multifamily property in Monrovia (1219 S Alta Vista Ave) traded for $12.2M. Warren Berzack and Stephen Geiger of Berzack Investment Property Advisors Group at Lee & Associates-LA North/Ventura repped the seller as well as the buyer, who owns about 2,000 multifamily units in SoCal. Built in 1971, the property received close to 10 offers and went into escrow after two weeks.
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An institutional buyer purchased a 64k SF, Class-A industrial building in Riverside (601 Columbia Ave) from Caspian Properties and Darrell Butler for $5.8M. The four-tenant, dock-high facility was sold as a fully leased investment, according to Mario Calvillo of Lee & Associates Riverside, who repped both sides.
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Rexford Industrial Realty acquired 17311 Nichols Lane, a 115k SF industrial facility in Huntington Beach, for $17.1M or $149/SF. The building is 100% leased at a below-market rent to an airline interiors company as its main West Coast engineering and production site. The tenant, which spent significant capital to create and expand the office portion and retrofit the warehouse, has more than eight years of term remaining on its lease plus a renewal option.
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Rider Street LLC bought a vacant 34k SF distribution/warehouse building in Perris (325 W Rider St) from Turner Island Farms for $4.9M or $143/SF. The freestanding building is on 14 acres and includes a large fenced yard, with about nine acres leased to a mobile modular company. Lee & Associates repped both sides: Allen Buchanan and Joshua Harper in Orange for the buyer, and Finn Comer and Bruce Springer in Riverside for the seller.
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A 4,875 SF pad building in Montclair (9015 Central Ave) traded hands for just under $2.5M, or $503/SF, in a 1031 exchange transaction. Part of the 111k SF Montclair Promenade, the pad is fully leased to Starbucks, Subway, GameStop and a soon-to-open Waba Grill. Progressive Real Estate Partners' Greg Bedell repped the private San Clemente investor who purchased the property from an investor in Montebello.
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6th & Pine Development bought three properties in Long Beach (203, 205 and 233 E Anaheim St) from ASFL 1 LLC for $3.2M. The properties contain 7.4k, 14.8k and 15.1k SF, respectively. Coldwell Banker Commercial BLAIR WESTMAC's Becky Blair and Sheva Hosseinzadeh repped the seller. Lee & Associates' Noel Aguirre repped the buyer.
LEASES
ChapCare, a nonprofit medical care group that's partially funded by the Affordable Care Act, leased a 6k SF shopping center space in El Monte. The tenant, which is expanding into retail locations in northeast LA County, brings further stability to the center with a long-term lease and diversification, according to Centers Business Management's Jason Ehrenpreis, who repped the landlord with colleague Geoff Grossman. Pasadena-based ChapCare serves the San Gabriel Valley and is El Monte's primary healthcare provider under the ACA. The location, a former Anna's Linens store, marks the provider's third clinic in El Monte (and eighth overall).
FINANCING
Continental Funding Group's J.M. Grimaldi and Nick Irving arranged $10.7M for the owner of four multifamily properties in LA and San Diego. The transactions include cash-out refis for three apartment buildings totaling 37 units in West LA. The loans are all non-recourse with 20-year terms and fixed interest rates for the first five years. In San Diego's Gaslamp Quarter, the pair arranged a bridge facility for the acquisition and renovation of a 1920s apartment building with 17 units.
EXECUTIVE NEWS
Andrew Turf, a high street luxury retail expert, joined CBRE’s retail services team as an SVP based in Dwntown LA. He'll also act as tenant representative on the West Coast and beyond, and collaborate with capital markets teams on a variety of real estate projects. Previously, he served as director of leasing at Tribeca Holdings in the UK, where he led the leasing of iconic properties like Old Spitalfields, and as a leasing pro with Caruso Affiliated in LA.
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NAI Capital tapped veteran industrial pro Jerry Gillman to oversee its South Bay operations as EVP and branch manager. Based in Torrance, he'll focus on building a South Bay industrial division while continuing to serve clients. Jerry brings more than 40 years of commercial real estate experience. He previously served as managing director with Newmark Grubb Knight Frank, where he was one of the top producers in the SoBay office.
