Qantas Airways’ Upscale Lounge Takes Wing at LAX

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In conjunction with Cathay Pacific and British Airways, Qantas Airways Ltd. has completed an upscale lounge in the Tom Bradley International Terminal at the Los Angeles International Airport.


The lounge will service first-class and business-class travelers. It opened last month and cost about $10 million to build.


The 14,000-square-foot space replaces two separate, interim lounges for first-and business-class travelers.


It has been built in anticipation of the arrival of the new jumbo Airbus A380, which Qantas will begin using next year. The Gensler-designed lounge is replete with modern furniture, a high-end buffet and restrooms that include private showers for passengers.


“It’s about six or seven times more expensive than a very high-end office of that size,” said William Robertson of real estate adviser and brokerage Studley Inc., who managed the project for Qantas, which is based in Mascot, Australia. “If you are taking a flight from New York to Sydney with a premier ticket and you are laying over in L.A., this where you’d go to have a really nice meal, have a couple of cocktails and go shower.”


Angela Emmerton, manager of the Qantas club lounge development, said the new LAX site could become a model for the airline’s future lounges.


“It was considered an extremely important port for Qantas and it was a huge consideration to have a premium lounge product to complement the A380.”


The project took 28 weeks to complete, said Robertson, director of project management for Studley’s downtown and West L.A. region.


“It was more of an involved process of coordinating the design and implementation at the beginning of the process to enable the subcontractors to get in and out of the secured area easily during construction,” he said.


Robertson said that upper-class passengers have already begun to respond positively to the new lounge. The showers have been a hit: “People really like that.”



Mall Breakup

The owners of the South Bay Pavilion, a 1 million-square-foot regional mall in Carson, have embarked on a break-up strategy at the property.


Burbank-based Shamrock Capital Advisors, the investment vehicle of Roy E. Disney, and Irvine-based development company Hopkins Real Estate Group own the mall in partnership via the HREG Genesis Carson LLC entity.


As part of the strategy, HREG Genesis Carson has sold the mall’s 24 Hour Fitness building at 945 Dominguez Ave. for $11.25 million to 24 Fit LLC, the entity of an unnamed, private real estate investor. The buyer purchased the property on a 1031 tax-deferred exchange basis.


The deal for the 32,921-square-foot building closed in October. The sale breaks down to $342 per square foot.


The sale coincided with the completion of a renovation of the mall by HREG Genesis Carson. Donald MacLellan, managing director of retail brokerage and adviser Faris Lee Investments, said the breakup makes sense for the mall owner.


“They were able to get a higher pricing by selling off individually,” said MacLellan, who represented the mall owner. He called it a “market-rate” sale.


The idea behind the breakup is for the mall owner to retain the core portion of the South Bay Pavilion but to sell off its out parcels for top dollar. Dan Beaney, managing director of Shamrock, said HREG Genesis Carson is not interested in selling off the entire mall. Faris Lee of Irvine has worked on breakups of other mall properties, including the Plaza at Puente Hills and the Torrance Crossroads.


24 Hour Fitness signed a 15-year lease at the property last year, when it first opened.


“The single-tenant market continues to be very strong because you have long-term leases with tenants that have strong credit,” MacLellan said.


Nicholas Coo of Faris Lee Investments represented the buyer and Richard Walter, also of Faris Lee, represented the seller.



Restaurant Sale

As part of the breakup move by South Bay Pavilion owner HREG Genesis Carson, the ground lease for the Chili’s eatery at 20760 Avalon Blvd. has also been sold.


The $2.8 million all-cash deal with buyer RPM Investments Inc., a Los Angeles-based real estate investor, closed last month. RPM Investments purchased the ground lease from HREG Genesis Carson on a 1031 tax deferred exchange basis.


The Chili’s opened earlier this year after signing a 10-year lease in late 2006. The 7,000-square-foot building sits on a 34,848-square-foot piece of property. The ground lease at the property is for 10 years with four five-year options, said Dave Maling of Marcus & Millichap Real Estate Investment Services Inc., who represented RPM Investments.


Maling said that a breakup of such a mall property isn’t that rare.


“It is typical that investors will go in and buy a large neighborhood center and then parcel off individual portions and sell off,” Maling said.


“The strength of the deal was that there aren’t a whole lot of sit-down restaurants in Carson,” said MacLellan, who represented the mall owner.


Maling’s brother and Chris Maling also represented the buyer. The seller was also represented by Walter.



Staff reporter Daniel Miller can be reached at [email protected] or (323) 549-5225, ext. 263.

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