Tenant Apple Shines in DealREAL ESTATE: Retail box sells for record $100 million. Monday, August 11, 2014
The global appeal of Santa Monica’s Third Street Promenade and the cachet associated with Cupertino tech giant Apple Inc. has made for another jaw-dropping real estate deal.
Two years after the glass-clad Apple store on the promenade sold for what was considered an eye-popping $60 million, it has sold again for even more. Bridgton Realty, a private family real estate business in New York, late last month purchased it for $100 million.
That means the 17,550-square-foot retail box sold for about $5,700 a foot, a record for a retail property in West Los Angeles. Just three other retail properties in the county – all on tony Rodeo Drive in Beverly Hills – have sold for a higher price per foot.
The one-story built-to-suit building at 1415 Third Street Promenade, constructed in late 2012 on the site of what used to be a three-story Borders Books & Music store, has stone-paneled side walls, a glass façade and a 34-foot-high glass ceiling. The last sale of the site came in July 2012, when the Apple store was under construction. The buyer then was denim manufacturer Jordache Enterprises Inc.
Jonathan Bennett, director of real estate for Jordache, said he was loathe to sell the building so soon after acquiring it, but the off-market deal was too good to turn down.
“When we sold it, it was not an easy decision, because we typically do not seek to sell properties that we buy,” he said. “But this number allowed us to bring a lot of the future value of the property to the present a lot more rapidly than I expected.”
Alan Cohen, an attorney at Duval & Stachenfeld in New York representing Bridgton, said his client used proceeds from a previous sale, along with some debt, to purchase the property for long-term hold.
“They believe they paid market price,” he said.
According to records at the New York Secretary of State, Bridgton is registered to KLM Construction Inc., a private New York company owned by the Kefalidis family. Public records show the deal was financed by a 12-year, $43 million loan from Massachusetts Mutual Life Insurance Co. and were signed by Elias Kefalidis on behalf of the borrower.
The New York Post reported in May that KLM sold a Manhattan building occupied by Old Navy for $252 million and was in the market for a tax-advantaged 1031 exchange. As part of that, KLM purchased a 110,000-square-foot Manhattan office building for $129 million.