The Los Angeles City Council last week unanimously approved a plan by California Landmark to build a $75 million condominium tower at the corner of Barrington Avenue and Wilshire Boulevard.
Construction of the 303-foot-tall high-rise is expected to begin in a year and take about 18 months to complete, according to California Landmark president Ken Kahan.
The 24-story building will contain 78 condos ranging from lofts to two-bedroom units, 10,000 square-feet of office space and 5,000 square feet of ground-floor retail. Kahan voluntarily agreed to set aside five of the dwellings as rental units for low-income families.
California Landmark hasn't decided if it will rent out the office and retail spaces or sell them, Kahan said.
A level of underground parking is included for the customers of the stores, but most of the parking will be above-ground, situated on several stories below the offices and condominiums.
The approvals mark the last chapter of what has been a string of controversial proposals for the site. Roy McNeill, who co-developed the Sherman Oaks Galleria and whose family has owned the property for more than 70 years, petitioned the city to build a 17-story office building in late 2001 but was thwarted by community opposition. McNeil sold the lot to California Landmark in July 2003 for $5 million.
A year later, Kahan proposed two plans for the site, one dominated by residential and the other by offices. Despite a controversial beginning, the condo project received final approvals within eight months. Kahan gained community acceptance by scaling back the proposal from 95 condominiums putting traffic exit onto a side street instead of the already congested Barrington and Wilshire.
"We modified the project significantly in the last couple of months to get where we are," Kahan said. "Overall, it's been an excellent process."
Broadreach Capital Partners LLC continued its fast pace of Southern California acquisitions last week with a $21 million purchase of 3330 Cahuenga Blvd. in Universal City.
The 104,000-square-foot, five-story office building is 37 percent vacant. Still, Broadreach managing partner David Simon said the Universal City market has been strong and filling the building's space wouldn't be difficult.
"This asset, given its location in a media district that attracts tenants from Hollywood, Burbank and Universal City, is a prime property," Simon said. "I think with the new leasing team we have in place, we should be able to lease it up and sell it as a new investment."
Broadreach seeks properties with vacancy levels higher than the market average and re-leases the buildings. After occupancy levels have been stabilized, usually in a three-to-five-year period, the company sells the properties.
Since opening a Los Angeles office in July, the company has closed three transactions, including a $27 million purchase of the Park Place office park in Culver City three months ago.
Broadreach, through its $314 million fund, is planning to buy a number of properties in the Los Angeles market, with the next deal expected to close early next quarter. "We see significant opportunities here," Simon said.
Kendrick Construction Inc. has bought a 219,000-square-foot industrial complex from Proficiency Capital Corp. for $12.4 million.
Located at 100 W. Victoria St. in Long Beach, the building is one of the last large industrial properties with developable space fronting the Long Beach (710) Freeway.
Invensys Climate Control, a subsidiary of Plain City, Ohio-based Ranco Inc., is currently leasing the building.
When the lease ends in April 2007, Kendrick plans to redevelop the site into a "higher and better use," according to Peter Castleton in Voit Commercial Brokerage's Anaheim office, who represented the buyer and the seller. "This building (is) a valuable asset with tremendous redevelopment potential," he said.
Garden in Bloom
Advertising and public relations giant WPP Group PLC has inked a lease for 73,000 square feet in the Water Gardens complex, according to sources close to the deal.
At going market rates, the 10-year deal is worth about $26 million. WPP plans to consolidate several of its subsidiaries currently spread out over L.A. County into two buildings in the Santa Monica business park.
Some of the WPP-owned companies moving into the space include advertising firms J. Walter Thompson Co. and Mindshare USA Inc. and public relation firms Burson-Marsteller and Hill and Knowlton Inc.
WPP is also in the midst of buying New York-based advertising firm Grey Global Group Inc., which has offices in 6100 Wilshire Blvd. Once the deal is done completion is expected early next year Grey's L.A. offices may also be moved into the Water Gardens.
Cushman & Wakefield Inc. senior director John Eichler represented WPP on the deal. Eichler confirmed the lease had been signed but declined further comment. Trammell Crow Co.'s Brad Cox and Jeff Lasky represented the Water Gardens' owner, a group of pension funds managed by J.P. Morgan & Co.
The WPP deal, along with the signing of several smaller new tenants, will make the Water Gardens 82 percent leased by the year's end. Equity Office Property Trust's Santa Monica business park on Ocean Park Boulevard is nearly fully leased and so will be the company's other office park, Colorado Center, if Yahoo Inc. inks a 250,000 square foot lease it's currently negotiating.
As vacancy levels in the Santa Monica submarket have tightened in the last six months, commercial brokers are saying landlords have begun asking for higher rents.
Staff reporter Andy Fixmer can be reached by phone at (323) 549-5225, ext. 263, or by e-mail at firstname.lastname@example.org .
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