A fund formed by San Francisco real estate investment firm Roxborough Group and Santa Monica investment firm Montana Avenue Capital Partners has reeled in a big one.
The fund bought a 119,600-square-foot Class A office building at 1700 E. Walnut Ave. in El Segundo for $33.5 million in a deal that closed last week. The firms paid $280 a square foot to the seller, USAA Real Estate of San Antonio.
The square-foot price was $10 steeper than average for the area, according to data from CoStar Group Inc.
Roxborough was drawn to the property because of the growing demand from tech and media companies in El Segundo, said Marc Perrin, the firm’s managing partner.
Montana Avenue was attracted to its value relative to the Silicon Beach market, and to a separate six-story parking structure that came in the deal, said Steve Elson, a Montana Avenue vice president.
The six-story office property is 99 percent leased by tenants that include tablet maker Fuhu and tech research firm iSuppli. USAA planned to sell the property once it was leased up, and chose now because of a favorable capital market, said Kevin Shannon of CBRE Group Inc., who represented the seller along with Ken White and Mike Moore. The buyer was represented internally.
The new co-owners plan to reposition the property by redesigning its common areas and amenities, among other creative office touchstones.
Montana Avenue has a track record of creative conversions in the submarket, including the Landing at 2040 Mariposa Ave. and the Station at 2201 E. El Segundo Blvd. It sold the Station in June to AGI Properties Inc. in Willow Street, Penn., for $31 million, almost three times what it paid when it acquired the property last year.
Twice the Renewal
Capital Group Cos., one of downtown L.A.’s biggest tenants, made a commitment last month to stay at 400 S. Hope St. for 15 more years after its lease runs out in 2018.
The deal with landlord CBRE Investors includes an expansion. Capital Group will take an extra floor, bringing its occupancy to 165,000 square feet from the 140,000 square feet in its current deal. Sources said the latest transaction is valued at close to $100 million.
The expansion is to accommodate new associates in sales and distribution as business grows, said a spokeswoman for Capital Group. The firm will move into the additional space next year.
The 26-story, 701,500-square-foot Class A office building is roughly 90 percent leased. It is the location of CBRE’s corporate headquarters.
Todd Doney, John Zanetos and Will Adams of CBRE represented the landlord. John McRoskey and Frank Scott of Jones Lang LaSalle Inc. represented Capital Group.
Capital Group signed another big renewal lease just across the street at 333 S. Hope in March, agreeing to stay in the 323,000 square feet it rents from landlord Brookfield Property Partners at Bank of America Plaza for 15 more years.
Acquisitions
West L.A.’s Northwood Investors snatched up four fully occupied industrial properties in Santa Monica at 2105-2143 Colorado Ave. for $44.5 million earlier this month, sources said. The sellers were brothers Shervin and Kam Mateen of Canon Commercial Inc. in Westwood and partner Gary Khamneipur of Santa Monica firm Pacifica Equities. The properties total roughly 55,000 square feet. Northwood did not respond to a request for comment on what it will do with the properties. … Glenn and Shannon Dellimore, co-founders of Hollywood skin care brand Glamglow, which they sold to the Estée Lauder Cos. in January, are cutting their teeth in real estate. They are investment partners with Massie Capital in the $25 million acquisition of the Gershwin Apartments, a 163-unit, five-story brick apartment building in Hollywood. Built in 1927, the property was formerly the Gershwin Hotel, and was redeveloped into apartments by its former owner, CIM Group. The purchase was financed with almost $21 million in bridge financing secured by Shahin Yazdi of Century City commercial real estate investment banking firm George Smith Partners. … Blake Fogel of Santa Monica’s Fogel Real Estate Corp. has acquired a 10,000-square-foot parking lot at 305 Ocean Front Walk on the Venice boardwalk for $7 million. He plans to build a mixed-use apartment and retail development on the site. Fogel is waiting to talk with the city to see what he can put up, but said the building would be roughly 15,000 square feet. Venice firm Du Architects will design the project. Fogel is under contract to buy two other buildings in the area, totaling 30,000 square feet, and is considering creative office conversions for those properties, given enticing area office rents of $8 a square foot.
Staff reporter Hannah Miet can be reached at [email protected] or (323) 549-5225, ext. 228.
