New York Family Betting Big on Beverly Hills Rentals

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The tallest office building in Beverly Hills’ “Golden Triangle” is trading hands at an eye-popping price.


The LeFrak family, wealthy New York real estate investors, is purchasing the 12-story building at 9701 Wilshire Blvd. for $80 million in a deal that is expected to close June 7.


The family is buying the building from Kennedy-Wilson Inc. on a 1031 tax deferred exchange basis as it is selling a residential property in New York City. The Beverly Hills-based real estate investment firm purchased the building for about $51 million last year.


The 111,165-square-foot building is 99 percent leased, said Kevin Shannon, a vice chairman at CB Richard Ellis Group Inc. who represented the LeFrak family.


The deal breaks down to about $720 per foot. “The buyer is counting on strong rent growth,” Shannon said.


The building is located in Beverly Hills’ “Golden Triangle” shopping and business district, where vacancy rates are even lower and rents are even higher than the rest of the city.


The asking rent for Class A space in the city was $3.81 for the first quarter, while the vacancy rate was 5.3 percent, according to Grubb & Ellis Co. But the vacancy rate in the Golden Triangle is less than 2 percent and the Class A asking rent is in the $5 per foot range, according to CB Richard Ellis.


“The pressure is on landlords to keep pushing rents a little higher, and there doesn’t seem to be pressure on vacancies going up at all,” said Clifford Smith of Kennedy-Wilson, who represented his firm in-house on the deal.


The building’s marquee tenant is City National Bank, which occupies over 25,000 square feet.


Kennedy-Wilson is in the process of completing a renovation of the building’s lobby, which will be completed in about two weeks, said Rob Hannan, a vice president at CBRE who also represented the buyer.


Mary Ricks of Kennedy-Wilson also represented the seller.


Ontario Deal


While Santa Monica and West Los Angeles office markets get all the ink these days with their low vacancy rates and $5 per foot rents, other areas have even tighter markets.


Take parts of the Inland Empire, for example. The Ontario International Airport market had a 5.1 percent vacancy rate for the first quarter lower than Santa Monica (5.6 percent) and West L.A. (8.6 percent), according to Grubb & Ellis.


The Hileman Co. LLC, a Beverly Hills-based real estate developer, is taking advantage of that strong office market in the Inland Empire with a new project.


The firm purchased a 16-acre, Class A office campus in Ontario from Trenton Group for $52 million in a deal that closed in mid-April.


The property includes two mid-rise office buildings for a total of 175,000 square feet of space. The buildings are fully leased. The project is also entitled for more development and Hileman Co. has taken over Trenton Group’s construction of a 150,000-square-foot building that is set to be completed in June 2008. The property is located within the 69-acre Centrelake office development at Haven Avenue and Guasti Road.


Hileman Co. has more plans for the property including another 100,000-square-foot office building and a six-story, 150-room hotel that would feed off the growing business community near the Ontario International Airport.


“It is a very high profile site, so a couple of hotel people are after us,” said Jack Hileman, president of Hileman Co.


Hileman said he is interested in selling off a piece of the 16-acre site to a national hotel developer and hopes construction of that project would begin by the third quarter of this year.


Hileman Co. purchased the property with partner Pacific Coast Capital Partners LLC of San Francisco. Both sides of the deal were represented by the CB Richard Ellis Group Inc. team of Darla Longo, Taylor Ing, Barbara Emmons and Michael Day.


Industrial Sale


Trendware International Inc. has sold a 16,324-square-foot industrial building at 3135 Kashiwa St. in Torrance after relocating to larger facilities at 20675 Manhattan Place. Trendware manufactures Ethernet network hardware.


The $3 million deal at $184 per square foot closed April 5 with buyers John and Kathy Wu.


“We set the bar there but that is definitely the market rate,” said Joshua May of Grubb & Ellis, who represented the seller.


Jeff Smart of Grubb & Ellis also represented the seller and Arnold Ng of Remax Commercial represented the buyer.


Palisades Office


Highpoint Capital LLC, a Santa Monica-based real estate investment firm, has purchased the office building at 860 Via de la Paz in the Pacific Palisades.


The firm purchased the three-story, 34,533-square-foot building from the Caloyeras Family 1999 Trust for about $13 million. Highpoint’s purchase was made with an undisclosed equity partner, said Jeffrey Seltzer, managing partner of the firm. Minette Siegel of First Financial Bancorp represented both sides of the transaction.



Staff reporter Daniel Miller can be reached at (323) 549-5225, ext. 263, or [email protected].

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