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Thursday, Jun 30, 2022

Sales of Downtown L.A. Lofts a One-Day Affair

Real estate developer Sonny Astani sold all 77 lofts at his downtown project, Concerto – all in one day.

The sales were significant because they give him a desperately needed cash infusion that will help him proceed with the rest of the $300 million project.

He acknowledged that the buyers got deals.

“Any time you sell 77 units in one day you are leaving something on the table,” Astani said. “It’s a small sacrifice I made.”

Astani found buyers for the lofts in the first building of the Concerto project at a sales event Aug. 29. The $31 million cash infusion will allow him to complete Concerto’s second building, a 30-story upscale condominium tower, without depending on money from his construction lender.

The project has been complicated by questions over Corus Bank of Chicago and its ability to provide the final 5 percent to 10 percent of a $200 million construction loan.

“What lets me breathe easier is that I am independent of this situation, where I have to follow up with this bank: if they fund, if they don’t fund or what happens if the FDIC steps in,” said Astani, who heads Astani Enterprises Inc. in Beverly Hills. “I have more than enough to finish the project without private equity, community or government funding.”

The lofts range from about 750 to 1,700 square feet. Astani said they sold for an average of $375 per square foot. That’s lower than he had planned when the project was first envisioned. The blended construction cost for both the loft units and the 271 upscale condo units in the tower is about $500 per square foot.

Astani put $55 million of his own money into the project at Figueroa and Ninth streets.

With the $31 million in his pocket, Astani expects to complete the tower by the end of the year. He could begin selling units there as early as next month.

Corus’ ability to pay out the loan was in question because of bad bets the bank had made during the real estate boom.

Burbank Renewal

Deluxe Digital Studios, an entertainment industry services company owned by Ron Perelman’s New York-based MacAndrews & Forbes Holdings Inc. holding company, has renewed a large lease in Burbank.

The six-year lease for 65,235 square feet at 2400 Empire Ave. closed in August. Deluxe leases an additional 13,000 square feet at the two-building property though that space was not part of the renewal. The buildings are held by CB Richard Ellis Investors LLC, an affiliate of West L.A. real estate services company CB Richard Ellis Group Inc., on behalf of an unnamed pension fund. The financial terms of the lease, which will begin Jan. 1, were not disclosed.

Deluxe, which does production and postproduction work, and also manufactures DVD and Blu-Ray discs, had looked elsewhere before re-signing at the property, said Roy Longman of brokerage CresaPartners.

Longman said Deluxe considered moving the office to Hollywood, where it has other facilities, and other sites in Burbank before deciding to stay at the property.

Paul Stockwell and Nico Vilgiate of CB Richard Ellis represented CBRE Investors.

Paper Palace

The waste paper export industry has been in a steep decline since the economic downturn walloped China, but that isn’t stopping a company in that business from expanding locally.

Ralison International Inc., a Hong Kong company with offices in Diamond Bar, purchased an 18,500-square-foot industrial property at 408 E. Alondra Blvd. in Compton. The building sits on 62,247 square feet of land. The $1.97 million deal with seller Boscon Inc., a steel fabrication company and the former owner-user, closed in mid-August.

Kent Choi of brokerage NAI Capital, who represented Ralison, said that his client believed it was important to own a local facility. Ralison wants to be positioned properly when the recovery comes around, Choi added.

“They have pretty much an established business despite the economy’s downturn,” he said.

What’s more, the company believed it could get a good deal because the downturn has forced sellers to lower real estate prices, Choi said.

In terms of land, the deal breaks down to a low $31.57 per square foot. The seller had originally wanted $2.4 million for the property.

“It’s fair because there is a lot of improvement in the land,” said Kevin Kim of Coldwell Banker Commercial, who represented the seller.

Ralison will store waste paper and cardboard at the facility, then send it to the port for shipping to China.

Staff reporter Daniel Miller can be reached at dmiller@labusinessjournal.com or (323) 549-5225, ext. 263.

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