A deal announced last week in Sherman Oaks may not be huge in and of itself, but it fits into a huge trend.
San Diego-based Senior Resource Group LLC purchased a 4.5-acre parcel of land on Vesper Avenue, where it plans to build a $35 million, 249-unit full-service retirement residence.
“L.A. is highly underserved,” said Michael Grust, president of Senior Resource. He noted that existing retirement communities are full and there’s been no new construction in the area for several years.
“We look at this as a way to serve people in the community,” he said.
Senior housing has been a growing sector for several years, but unlike some areas that may be getting a glut of such projects, including parts of Arizona and Orange County, the prognosis for the Los Angeles area is especially strong.
According to the Concord Group real estate advisory firm, demand for senior housing in Los Angeles County will grow by 13 percent to 17 percent over the next five years, with specialized assisted living for residents with Alzheimer’s and other impairments the fastest-growing segment.
Those projections have not gone unnoticed in the real estate community. Several national builders of senior housing are looking for sites in the L.A. market, and projects are being pursued everywhere from Valencia to West Hollywood to Diamond Bar.
“Most clients I deal with would love to be in L.A. County,” said David Rothschild, who leads CB Richard Ellis’ newly formed senior housing real estate services group.
Much of the development activity in senior housing is at the high end of the spectrum, with a huge demand going unmet at the low- to moderate-income end. The main reason is that land is so difficult to secure, said Samuel Wacht, a Calabasas-based architect who has designed 6,000 units across the country.
“There’s more buyers and developers than land available,” said Wacht, who designed a 64-unit luxury assisted living facility at 220 N. Clark Dr. in Beverly Hills that recently began construction. Called BridgePoint, it is that city’s first assisted living facility and will offer a spa, rooftop activity area, chauffeured transportation, housekeeping and personal assistance.
“You can’t get any higher (end),” Wacht said.
Western move
Western Initiative Media (formerly Western International Media), which has been in the market for some time looking for new headquarters space, finally inked a deal last week at Wilshire Courtyard in the Miracle Mile.
The company plans to take 130,000 square feet of office space on the fourth and sixth floors of the eastern building at 5700 Wilshire Blvd., said Blake Mirkin, a broker at CB Richard Ellis who represented the company, along with colleague Brian Davies. CB’s Hunt Barnett represented the landlord.
The 15-year lease deal is worth about $60 million.
Mirkin said Western Initiative plans to move in phases, taking 80,000 square feet by Jan. 1 and the balance in 2001 when its current lease expires at 8544 Sunset Blvd. in West Hollywood. That building is slated to be torn down to make way for a $250 million hotel-retail-office development.
“They’ve been looking for a more appropriate corporate home,” Mirkin said. “They were in a number of buildings spread out over two blocks. The goal was to consolidate.”
Western Initiative has 600 employees and is the largest media-buying company in the world. The deal comes after two years of hunting and final lease negotiations at three other locations.
“This completes the repositioning and turnaround of Wilshire Courtyard and establishes it as one of the premier entertainment and media buildings in Los Angeles,” said Tom McCarthy of McCarthy Cook & Co., one of Wilshire Courtyard’s owners, adding that the property is now 96 percent occupied.
AEW lures bidders
About 10 bids have been placed on AEW Capital Management’s 3 million-square-foot portfolio of industrial properties, most of which are in the South Bay and La Mirada.
The portfolio is expected to fetch about $150 million, sources said. It includes the La Mirada Commerce Center, L.A. Business Center in Compton and the Dominguez Hills Center and University Commerce Center in Rancho Dominguez.
The deal is being brokered by Eastdil Realty and the Seeley Co. Officials with those firms did not return calls.
Speculative building planned
Trammell Crow Co. has acquired an eight-acre site on North Hollywood Way in Burbank for about $7.1 million and is already laying plans to build a three-story, class-A office building at the site.
Trammell obtained entitlements for the 155,000-square-foot speculative building, which it plans to start constructing in the third quarter. First, it plans to demolish several industrial buildings at the site, which is across the street from Burbank Airport, said Mark Ossola, senior vice president of development with Trammell Crow.
Ossola said the new building will have large floor plates and two courtyards, which should appeal to entertainment tenants.
Trammell acquired the property from AREH of New York, which had done a sale-leaseback deal with Lockheed Martin Corp. Brad Koehler of the Seeley Co. represented both sides in the deal, while Trammell will handle development, management and leasing.
Mortgage bid
Equity Office Properties Trust has emerged as the frontrunner to acquire the mortgage (in the form of bonds) on 1999 Avenue of the Stars in Century City, also known as SunAmerica Center.
Citicorp Real Estate is selling the bonds on the 38-story high-rise, which is owned by JMB Realty Corp. The building is burdened with a debt load of about $400 million. While Equity could not confirm the deal, sources said the Chicago-based real estate investment trust has bid $400 per square foot, or more than $300 million.
Quick turnaround
Only two months after moving into its expanded corporate headquarters in Santa Monica, eToys is in the market for 150,000 to 200,000 square feet of headquarters office space, said Matthew Miller of Cresa Partners, who represents the newly public company. Etoys would like to stay on the Westside, but is considering alternatives from Miracle Mile to the Airport to accommodate its rapid growth.
Elizabeth Hayes can be reached at (323) 549-5225 ext. 229.
