How tight is the L.A. County medical office market? Consider what the Huntington Reproductive Center had to go through to get some space in the San Fernando Valley.
When the Pasadena-based fertility clinic couldn’t find room for an Encino clinic it resorted to an unusual and costly measure: converting offices on Ventura Boulevard into medical use.
The center worked out a deal with Encino Spectrum LLC to carve out 17,182 square feet of office space at 1550 Ventura Blvd., taking two floors of the three-story Encino Arches property.
Huntington signed a $9.4 million, 12-year lease in mid-November with the landlord, a partnership of unnamed local real estate investors. It will pay about $3.15 per square foot per month on a full-service gross basis, an above-market rate.
“It’s a supply-and-demand issue,” said Michael Dettling of Ramsey-Shilling Commercial Real Estate Services Inc., who represented Huntington. “This was the only building in the greater Encino-Tarzana area that offered the conversion to medical for such a large portion of space.”
But that’s not all; the 80,000-square-foot property still needs significant renovation. Huntington plans to spend $300 per square foot to build a surgery center and fertility lab on the first floor and $100 per square foot to build medical offices on the second floor.
Huntington, which is moving its area clinic from Tarzana, will begin remodeling the property after Jan. 1 and should occupy the new facility about six months later.
Scott Romick and Trevor Belden of Lee & Associates Commercial Real Estate Services represented the landlord.
More Medical
Another unique medical office deal recently closed in L.A. County.
Southern California Orthopedic Institute, a private practice based in Van Nuys, signed a 15-year lease for space at Bridgeport Marketplace a new mixed-use development with a variety of retail and restaurant tenants in Valencia.
Doug Sonderegger of CB Richard Ellis Group Inc. said that the orthopedic group sought out a mixed-use project that had retail and other amenities, unusual for a medical practice.
“I think it was kind of a step forward of what we are going to see more of,” said Sonderegger, who represented the landlord, a partnership of developers Intertex Cos. and A & B; Properties Inc., a unit of Alexander and Baldwin Inc. “Some of these practices want to be around other amenities and where people want to be.”
Other tenants at the 170,000-square-foot property include supermarket Bristol Farms, California Pizza Kitchen and Walgreens. Terms were not disclosed for the 23,329-square-foot lease at 24015 Newhall Ranch Road, but Sonderegger called it a market-rate transaction.
The group plans to occupy the space in March, once construction of its interior space is complete, Sonderegger said. It will use the space for its orthopedic and rehab practice. The orthopedist group, which did not return calls for comment, is leaving another office in the Valencia area.
Bryan Lewitt, Chris Isola and Mark Raggio of Cushman & Wakefield Inc. represented the orthopedic group.
Historic Sale
The Val D’Amour Apartments, a historic rental property in Koreatown, has changed hands for $7.52 million a sale price that is on the high side of the market.
Los Angeles-based Sebren Development Inc., a real estate investor, sold the 854 S. Oxford Ave. property to an unnamed local investor Nov. 12. The 79-year-old art deco property has 72 units but not much else no gym, no laundry room and no parking. Still, it sold for $104,451 per unit, a price that’s higher than other recent sales of comparable buildings in the area.
Brent Sprenkle, a broker with Sperry Van Ness Real Estate Services, said that the price, despite the lack of amenities, highlights the strength of the Koreatown residential market.
“People still are paying high prices for the right deal,” said Sprenkle, who represented the seller. “It does offer an investor great long-term upside.”
Sprenkle said that Sebren had purchased the property about three years ago and completed an extensive rehabilitation. The building is protected by the city’s rent-control ordinance and is a historic-cultural monument.
The property has 10 one-bedroom units, 50 studios and 12 units that lack full kitchens. The rents range from $480 to $1,395 on a monthly basis. It had two vacancies at the time of sale.
Commercial broker Jonathan Wintner represented the buyer.
Staff reporter Daniel Miller can be reached at [email protected] or (323) 549-5225, ext. 263.
