Redwood Properties Inc., a Newport Beach real estate investment company, has bought a portfolio of four Hollywood apartment buildings for $40 million in an off-market deal.
The properties, at 1820 Whitley Ave., 1837 Whitley Ave., 6600 Yucca St. and 1823 Grace Ave., total 222 units and are all within a few blocks of the Hollywood Boulevard and Highland Avenue intersection. The seller in the deal, which closed April 21, was Milan Capital of Anaheim.
Redwood has already begun significant interior and exterior upgrades to the buildings, which were built in the late 1980s and early 1990s, including replacing countertops and rooftops.
“My client’s intentions are to go in, renovate and to value add because these apartments have the capability of competing in the Hollywood submarket,” said Michael Balson, broker at Keller Williams Beverly Hills who represented the buyer. “Since they are in original condition, the updating will allow them to effectively fill the buildings and create four boutique apartment properties.”
The peach-colored, box-shaped buildings are typical 1980s-style construction and have rectangular balconies. The buyer also was attracted to the properties, which total almost 338,000 square feet, because they are not rent controlled.
Redwood assumed the seller’s $20 million loan on the properties as part of the $40 million total sale price. The company owns four other large apartment buildings and a handful of other residential properties in Los Angeles County.
“It’s a really good opportunity, as far as buying apartment investments, as the market improves,” Balson said. “Everyone seems to feel like the rental market is starting to show some signs of strength.”
Milan represented itself in-house.
Hotel Sales
The sale of more than a dozen hotels in the county in the last month is a sign that the local hotel market is on its way to recovery.
Fourteen hotels, including the Pasadena Westin Hotel, have sold in the county since May 1. Only three hotels sold in the same period last year. The increased activity makes business sense, according to Jeff Lugosi, a hospitality analyst with Colliers International PKF Consulting.
“Hotels reprice their rooms every night, so hotels fall into the recession first and furthest, then they usually come out and first and strongest,” said Lugosi. “The performance of hotels, by any real estate measure, has done quite well.”
The local hotel market’s metrics are looking up. The county’s average daily room rate increased 5.4 percent to $121.14 in March over last year, according to the Los Angeles County Economic Development Corp. The revenue-per-available room, a figure used to measure a hotel’s business, grew by 12.7 percent to $87.62 in March compared with the previous year, while hotel occupancy increased nearly 5 points to 72.3 percent.
The Pasadena Westin was sold by MPG Office Trust Inc. to Norwalk, Conn.-based HEI Hospitality for $92 million. The 260,000-square-foot property at 191 N. Los Robles Ave. has 350 rooms. In Culver City, Harrisburg, Penn.-based Hersha Hospitality Trust purchased the Westside Marriott Courtyard at 6333 Bristol Parkway for $47.5 million from Urban Hotels Inc. The 168,000-square-foot, 260-room hotel was bought May 23 after barely two weeks on the market.
The most high-profile sale was that of West Hollywood’s Mondrian Hotel in early April. Bethesda, Md., real estate investment trust Pebblebrook Hotel Trust bought the 237-room landmark at 8440 Sunset Blvd. for $137 million from Morgans Hotel Group.
As the market continues to improve, Lugosi said, hotel acquisitions will continue.
“I think we’ll see the momentum through the balance of this year,” he said.
Westward Bound
TV and movie special-effects company Look! Effects is heading for the coast – from Hollywood.
The company, which produced the effects for Academy Award winner “Black Swan,” has inked a five-year lease for 8,539 square feet at 12910 Culver Blvd. near Marina del Rey. The total lease is valued at more than $1 million.
Look will move out of its digs in Hollywood’s El Capitan building at the end of the month. It will join Zynga Games Network, production company ScanlineVFX, reality TV producers Go Go Luckey Entertainment and other creative firms already in the area.
“We really looked everywhere and this really answered all their needs economically and in terms of the facility,” said Loralie Ogden, a CB Richard Ellis Group Inc. broker who represented Look. “The landlord was very excited to have them as a tenant and was willing to reach.”
Look also was represented by Ogden’s colleague Jeff Harris. Landlord Westbrook Marina Office LLC was represented in-house by Lawry Meister.
Staff reporter Jacquelyn Ryan can be reached at [email protected] or at (323) 549-5225, ext. 228.
