The recent opening of a Century City office by brokerage and advisory firm Stan Johnson Co. reflects growing faith in the low-risk, low-reward market of single-tenant lease deals.
The Tulsa, Okla.-based brokerage specializes in such deals with creditworthy tenants such as CVS or Walgreens – plays that are becoming more attractive to nervous investors, said Daniel Herrold, executive managing director of business development at Stan Johnson.
“We’re kind of the bond investment in the real estate world,” Herrold said. “As the commercial real estate market tanked, our market didn’t fall nearly as much. Our assets are relatively stable and risk free relative to other real estate investments.”
Herrold said this year is shaping up to be one of the best in the history of the 22-year-old firm, which opened its second office only two years ago in Houston. Los Angeles is its fourth office and part of an expansion strategy intended to grow the firm to a total of six or seven offices.
Heading the L.A. office is Derek Layne, previously a principal of Brooktree Realty Advisors in Beverly Hills. Plans are to grow to 15 employees in the next three years.
Stan Johnson is expanding at “absolutely the right time,” Layne said.
“Certain other groups seem to be putting a decent amount of head count into, or wanting to expand their single-tenant net lease teams,” said the 36-year-old broker. “In ’09, investors kind of sat by and wanted to see what would happen. I think people now have started to say, ‘I need to have some type of return on investment.’”
Real Estate Accounting
While Stan Johnson doubles down on its niche, Reznick Group PC, an accounting firm that specializes in real estate, is seeking to expand beyond commercial real estate work, which makes up 100 percent of its business in Los Angeles.
The Bethesda, Md.-based firm wants to move into affordable housing and the renewable energy industry locally. To oversee this potential growth, it recently appointed Tom Fassett, who has been running its Charlotte, N.C., branch for the last nine years, as the L.A. office’s new managing principal.
Fassett, who helped grow the Charlotte office from 25 to 80 employees, will be faced with a similar task here. The L.A. office opened in 2006 and has 25 employees. He expects it to grow to up to 100 in the next four years.
“In L.A., developers are trying to find new ways to build their projects, whether through additional resources or through cost savings,” said Fassett, 48. “We can help those clients use multiple programs.”
Reznick Group Chief Executive Ken Baggett said Fassett brings experience in those areas to Los Angeles.
“Tom brings another layer, which is the affordable housing side, and in California that is a huge market and a very valuable one right now,” Baggett said.
BREAKING GROUND
STELLA
13488 Maxella Ave., Marina del Rey
DEVELOPERS: Merlone Geier Partners, of San Francisco and San Diego, and GLJ Partners LLC, of Carlsbad.
PLANS: $100 million-plus mixed-use luxury apartment and retail project designed by L.A. office of DesignARC Inc. Two midrises will house 244 units atop 9,000 square feet of retail and two levels of parking. Amenities include saltwater pool, sand beach with private cabanas, outdoor dining rooms and spa.
OPENS: Project broke ground Oct. 7 and completion is targeted for fall 2012.
PRICING: Studios are projected to rent for less than $2,000, one-bedroom units from $2,300 to $2,700 and two-bedroom units for more than $3,000. Twenty-four units will be offered at below-market rates in compliance with affordable housing rules.
NOTABLE: The building incorporated sustainable materials and is energy efficient. The developers are seeking Leadership in Energy and Environmental Design certification by the U.S. Green Building Council. The complex, in a bike-friendly neighborhood, also boasts a “Hub” bicycle kitchen where residents can clean, repair and store their bikes.
