As the owner of several California card clubs, Haig Kalegian has made some large wagers but none possibly as high as buying the Crystal Park Casino Hotel in Compton.
Kalegian, who owns the 151-table Bicycle Club in Bell Gardens, is buying the property for close to $17.5 million. The card club contains a 226-room hotel that sits on 20 acres at 123 E. Artesia Blvd.
The seller, Pinnacle Entertainment Inc., decided to sell the property shortly after California voters roundly rejected a 2004 referendum that would have allowed card clubs to operate slot machines.
Card clubs and racetrack owners complain they can no longer compete with casinos operated by Native American tribes that have been allowed to have slot machines.
Pinnacle, which also operates a casino at Inglewood’s Hollywood Park racetrack, had anticipated getting the highest price for the property from a developer wanting to raze the card club.
“We took it out to everyone commercial and industrial buyers,” said Colin Walker, a CB Richard Ellis Inc. associate who represented Pinnacle in the transaction. “We didn’t expect another casino operator to be the buyer.”
Except Kalegian sees promise.
The operator, who also runs Ocean’s 11 Casino in Oceanside, plans to invest money renovating the casino and hotel to make the casino a regional destination. Walker said CBRE valued the replacement cost of the land and structures at close to $50 million.
“He bought the property based on the gaming,” Walker said. “It’s the only part that really makes money, though that could change under the new ownership.”
Kalegian could also stand to benefit from a large mixed-use development that would surround the Compton casino and be called the Gateway Towne Center. Costa Mesa-based Prism Realty has purchased 40 acres in the area and is planning a large retail and housing project that could draw more visitors to the area.
Meanwhile, Kalegian may have redevelopment plans of his own for the property. With the hotel and casino occupying only 20 percent of the 20-acre site, there’s an opportunity to propose a project on the site’s vacant land, currently parking lots. “If they want to take advantage of it, there’s a strong real estate play there,” Walker said.
Irreplaceable
Kennedy Wilson purchased the prominent office building at 9701 Wilshire Blvd. for more than $51 million.
The 12-story building sits at the northeast corner of Wilshire Boulevard and Roxbury Drive in the heart of Beverly Hills’ so-called Golden Triangle. The 108,000-square-foot building built in 1973 contains six levels of parking.
Broadway Real Estate Partners LLC sold the building after purchasing it about two years ago for $37.6 million. During its ownership, Broadway boosted the occupancy to 95 percent from 85 percent.
In one of the larger deals, R.O.A.R. Management Co. Inc. a new talent agency formed by former Endeavor agent William Ward and former MGM vice president Jay Froberg is moving into the building and took building-top signage.
Other significant tenants include Synergy Workplaces, City National Corp. and John Paul Mitchell Systems.
“It’s a unique location in Beverly Hills, one of the few high rises in the city and it’s absolutely irreplaceable,” said Barry Schlesinger, chairman of KW Fund Management, the Kennedy Wilson division that bought the property.
Kennedy Wilson used a mix of money from its KW Fun I and KW Fund II to buy the building.
Schlesinger said the property commands a premium because Beverly Hills has restricted all new construction to a 45-foot height limit or about three stories. “New construction of this kind is just not going to happen,” he said.
Beverly Hills has one of the best performing office markets in L.A. County, according to Grubb & Ellis Co. At the end of March, the Westside submarket had a 6.1 percent vacancy rate and asking rents of $3.20 a foot.
Playa Dreaming
Lincoln Property Co. is buying a 14-acre site in Playa Vista for more than $100 million.
Lincoln formed a partnership with ASB Capital Management to build an 820,000-square-foot office building on the parcel, located near the Hughes’ Spruce Goose building at the corner of Bluff Creek and Campus Center drives.
The seller, Playa Capital Co. LLC, already received approval from the city to build the project.
Developers plan to begin construction on the project’s first phase a roughly 400,000-square-foot office building within the year. Construction is expected to take between 18 and 24 months to complete.
The high price for the land is a reflection of the growing demand for office space on the Westside, where buildings are filling up but few new projects are coming to market.
During Playa Vista’s first phase, developer Rob Maguire built the Water’s Edge office complex that is occupied mostly by video game producer Electronic Arts Inc.
Two years ago Maguire bought out Chicago-based Equity Office Property Trust’s 87.5 percent stake in the property for $85.5 million. Water’s Edge has entitlements for a 192,000-square-foot building.
The Cushman & Wakefield Inc. team led by Senior Director Carl Muhlstein had the listing.
Staff reporter Andy Fixmer can be reached by phone at (323) 549-5225, ext. 263, or by e-mail at
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