The Los Angeles real estate community is still abuzz over the $500 million sale of 9900 Wilshire Blvd. in Beverly Hills the planned site of an ultra-luxurious condominium project designed by Pritzker Prize-winning architect Richard Meier.
British developer Candy & Candy paid about $62.5 million per acre or $1,445 per square foot for the site of the former Robinsons-May store at the western edge of Beverly Hills in a deal disclosed on April 10.
Former owner New Pacific Realty Corp. of Beverly Hills paid $33.5 million for the property just three years ago, though since then it commissioned Meier, who designed the Getty Center, and was working on getting entitlements from the city.
Still, some say the premium paid by the British development company for the 8-acre property will undoubtedly drive up luxury condo prices throughout Los Angeles.
"This sale has made us all stop and think and I think we will evaluate the market over the next couple months," said Steve Fifield, president and founder of Fifield Cos., a real estate development firm that is building a high-end condo tower nearby at the other side of the Los Angeles Country Club. "I think this London developer has brought a worldview that L.A. is one of those world class cities."
Some say the deal could drive Los Angeles condo pricing into New York City and London territory cities that can regularly command $2,000 per square foot in sales of completed condominiums. The square footage of the Beverly Hills condo project has not been disclosed but given Candy & Candy's purchase price, brokers fully expect units at 9900 Wilshire Blvd. to easily hit the $2,500 per foot mark.
"I think it's clear now this sale transaction represents Beverly Hills' standard," said New Pacific Realty chief executive David Margulies. "This is about Beverly Hills re-envisioning its future. Some people have said it's resting on its laurels. If you take a world comparison approach and look at buildings in New York and London, there clearly is a trading gap."
Candy & Candy spokesman Harvey Englander said that the company plans to execute New Pacific Realty's plans for the property, which includes the Meier-designed luxury condos. Candy & Candy will seek entitlements for the development this summer.
Fifield's forthcoming 1200 Club View tower, which it is developing with Raleigh Enterprises Inc., made a splash last year when it was announced that the asking price for the penthouse at the 21-story Westwood building was $18 million, or $2,161 a foot.
Compared to the 252-unit Candy & Candy development, 1200 Club View is small, with just 35 units. The condo tower is scheduled to open in fall 2009, and will sell for an average of about $1,500 per foot, Fifield said.
"We are those provincial guys. We looked at land cost," Fifield said. "(Candy & Candy) is making a bet that people will get those (higher) prices in L.A."
There will also be a limited number of ultra high-end condo units at Beverly Hills' forthcoming Montage Hotel that could sell for $3,000 a foot. That project would open in 2009.
The Service Employees International Union Local 1877 has purchased three adjacent buildings at 806-828 W. Washington Blvd. near downtown where it will move its headquarters.
The 30,000-square-foot office transaction, which closed in early March, was valued at $5.6 million. The union will occupy the space in mid May.
The market rate deal with seller Association for Los Angeles Deputy Sheriffs breaks down to $187 per square foot. The property includes a two-story office building and two one-story industrial buildings that will be converted into office space, said Brian Denton of Grubb & Ellis Co., who represented the union in the deal.
The union needed the new office space after selling its former headquarters at 1247 W. 7th St. That property was purchased last June by Witmer Development LLC for $8.9 million. Witmer will build a condo tower there.
Grubb Ellis' Maury Gentile also represented the union. The seller was represented by Mark Tarczynski of CB Richard Ellis Group Inc.
Staff reporter Daniel Miller can be reached at (323) 549-5225, ext. 263, or firstname.lastname@example.org .
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