Torrance has paid $17.6 million for a 15-acre parcel, where it plans to build a bus terminal as soon as this year.
Down the road, the property at 465 Crenshaw Blvd. also could serve as a stop for an extension of the Metropolitan Transportation Authority’s Green Line.
“It’s planning for the future,” said Assistant City Manager Mary Giordano. “The city does not (currently) have a specific transit center.”
The city purchased the property, one-half mile south of the San Diego (405) Freeway, from paint and glass manufacturer PPG Industries Inc. on Dec. 17. Giordano said PPG’s plant was razed about five years ago but the property required environmental remediation.
The bus terminal will be built on five acres of the site also pegged for a light-rail station should the Green Line be extended from its current terminus in Redondo Beach. It is unclear what the city will do with the remaining 10 acres, but that is an issue that will taken up by the City Council, Giordano said.
The sale concludes a lengthy process for the city, which was looking to buy a transit center property for about five years.
Broker Todd Taugner of Klabin Co., who represented the city, said that while there are few comparable deals in the marketplace, the $27-per-square-foot price is lower than industrial land deals completed in the area as recently as 2006. He said Torrance industrial land sold at more than $40 per square foot only a few years ago before the slowdown in international trade and port traffic.
Dave Stromath of CB Richard Ellis Group Inc. represented the seller. He did not return calls seeking comment. PPG declined to comment.
Hollywood Sale
A local real estate investor has purchased an apartment property in the heart of Hollywood in a transaction typical of the current buyer’s market.
Lion Real Estate Group LLC, a real estate investment company formed in 2008 with a focus on buying distressed assets, has purchased a fully leased, 36-unit apartment building for $5.48 million. The 32,920-square-foot building at 1757 Orange Drive, near Hollywood Boulevard and Highland Avenue, was sold Dec. 15 by a partnership of Coastline Real Estate Advisors Inc. and Praedium Group.
Lion principals Jeff Weller and Mory Barak said they were able to pick up the property for far less than the previous owner’s total cost of ownership.
Barak said that the partnership had paid about $6.2 million for the property in 2005 and had spent about $500,000 upgrading it.
“The previous owner spent a lot of money on the project and a lot of time on it,” Weller added.
Darin Beebower of Madison Partners, who represented both parties, said that the partnership sold because it had executed its business plan, which involved renovating the building and turning over units with below-market rents.
“They essentially accomplished that,” he said. “Obviously market conditions have changed since they acquired the property. They made the determination that it didn’t make any sense to hold the asset in the current market any further.”
James Killian, director of Coastline, said that during the partnership’s ownership the occupancy went from 83 percent to 100 percent.
The deal breaks down to $166 per square foot or $152,000 per unit. Barak said that Lion has purchased other apartment buildings in lesser locations at higher-per-unit costs.
“This is an infill Class A asset, and we got it at a good basis,” he said.
Praedium declined to comment.
Loan Originator Hired
Berkadia Commercial Mortgage LLC has hired a commercial mortgage loan originator for its Westwood office.
The company’s hire of Matthew Case boosts the number of loan originators in the office to five and is a signal that the Omaha, Neb.-based company expects to do more business, said Ed Zimbler, manager of the Westwood office.
Berkadia acts a loan servicer for life insurance company clients, with whom it also has so-called correspondent relationships. In such business relationships, a loan servicer such as Berkadia brings deals to insurance companies for funding consideration.
Zimbler believes that insurance companies are ready to start lending, partly because the portions of their balance sheets devoted to commercial real estate have shrunk considerably.
“Overall, life insurance companies will become a big lending source in 2010,” he said. “Unlike banks, who aren’t going to be able to take on any more commercial real estate loans, you are going to see a fairly good increase in commercial real estate loans (originated by insurance companies).”
Prior to joining Berkadia in January, Case worked for Amherst Real Estate Capital Inc. Zimbler said that he didn’t hire any loan originators in 2009.
Staff reporter Daniel Miller can be reached at [email protected] or (323) 549-5225, ext. 263.
