A shopping center at the gateway to the Sunset Strip has fetched one of the highest prices ever paid for a large L.A. retail property.
Palisades Group has paid about $66 million for 8000 Sunset Blvd., a 167,000-square-foot shopping center southeast of Sunset and Crescent Heights boulevards that’s anchored by a Virgin Entertainment Group Inc.’s Virgin Mega Store.
Brian Hass, a Palisades Development partner, confirmed the firm had purchased the property but declined to offer details.
The sale works out to about $400 a foot one of the highest prices paid for an L.A. shopping center property of comparable size, according to a search on CoStar Realty Information Inc.
The seller, L.A. Wilshire Corp., purchased the center less than two years ago for about $44.5 million. L.A. Wilshire Corp. had its hands full repositioning the center, which has recently gone through some tenant turbulence.
Wolfgang Puck Caf & #233; closed and a California Pizza Kitchen Inc. location was recruited to take its place.
The shopping plaza also has five levels of underground parking with close to 500 spaces. Other notable tenants at 8000 Sunset include a Crunch Fitness International Inc. gym, a Sam Ash Music Corp. store and a four-screen cinema operated by Laemmle Theatres LLC.
Palisades Development has big plans for the property, according to sources close to the deal. The West L.A.-based firm intends a yearlong renovation that is intended to add more life to the shopping center, sources said.
Palisades Development has been extremely active in L.A during the last several years.
Reeve Benaron, sales director with Stafford Commercial Real Estate, represented both sides of the transaction. When contacted for comment, Benaron referred calls to Palisades Development.
Working Out
Things seem to be working out for the Ratkovich Co. at its mixed-use business park, the Alhambra, where a buyer may pay $200 million for a stake in the complex.
Cigna Financial Partners, Ratkovich’s partner in the 28-acre campus, is close to selling its stake in the property to insurance behemoth American International Group Inc. for close to its asking price, according to sources involved in the deal. The property has been on the market since the summer.
Under the scenario, Ratkovich Co. could retain its interest in the property, where the L.A.-based developer has just inked a $43 million deal to build a 50,000-square-foot gym for L.A. Fitness Inc.
The listing includes the 18-building, 950,000-square-foot office campus, an 18,000-square-foot retail component that has been under construction since March, and land entitled for 350-units of for-sale housing. A deal could be completed within several months, the sources said.
When L.A. Fitness opens scheduled for late 2007, the Alhambra will be more than 97 percent leased.
The structure will be built on the corner of Orange and Fremont avenues and will require the demolition of existing facilities, Ratkovich said. L.A. Fitness will incorporate an outdoor swimming pool, basketball court, spinning and weight rooms into the facility.
“The addition of L.A. Fitness is the next step in the Alhambra’s transition from a purely office campus into a true urban community,” Wayne Ratkovich, the company’s president, said in a statement. “The sports club joins our shopping center to offer tenants a variety of amenities that make the Alhambra an attractive place to work and play.”
Trade publication Real Estate Alert first published reports that AIG is close to buying out Cigna Financial Partners.
In the lease, Ratkovich was represented by Grubb & Ellis Co.’s Linda Lee and Brenden Monaghan. Irvine-based L.A. Fitness was represented by RealSource Partners and Peter Isakovic of Grubb & Ellis.
Swan Song
Beleaguered music retailer Tower Records has listed its prized flagship location on the Sunset Strip.
West Sacramento-based Tower Records, owned by MTS Inc., is looking for a buyer who will purchase or redevelop the roughly 1-acre property and lease back the space to the retailer on a short-term basis.
Tower, which operates about 90 stores worldwide, emerged from bankruptcy two years ago under new ownership. Yet according to Billboard magazine, the music retailer has again put itself up for sale. Tower has hired L.A. investment banking firm Houlihan Lokey Howard & Zukin to market the company, the magazine reported last month.
Once one of the nation’s preeminent music store chains, Tower Records has struggled in the last five years to compete with discount stores, Web retailers and music downloading legal and otherwise.
Its 8,500-square-foot West Hollywood location at 8801 Sunset Blvd. has been a music industry icon since its 1971 opening.
MTS Inc. has hired Alexander B. Sachs, a vice president at Coldwell Banker WestMAC to market the property, which other brokers believe could fetch around $12 million.
*Staff reporter Andy Fixmer can be reached by phone at (323) 549-5225, ext. 263, or by e-mail at
[email protected]
.
