A plan to restructure the American Red Cross of Greater Los Angeles by selling off real estate is nearly complete, with the organization selling four buildings in the last 12 months.
Most recently, the Red Cross unloaded a 10,000-square-foot building at 129 Juniper St. in Los Angeles to La Brea Juniper Properties LLC for $2 million on Jan. 22. And the $3 million sale of a 17,566-square-foot building at 5051 E. Third St. in East Los Angeles to National Community Renaissance Inc. is set to close in May.
About two years ago, the Red Cross hired commercial real estate brokerage Cresa Partners LLC to analyze the organization's use of its space. Over the years, the Red Cross had acquired a 165,000-square-foot real estate portfolio largely through donations but only needed about 30,000 square feet, said Dave Leit, vice president at
After the Cresa study, the Red Cross tapped Leit to sell the properties taking advantage of the hot commercial real estate market and instead find rental space for the organization.
"We had excess space and valuable donor dollars going to fund facilities that we didn't need," said Timothy Nguyen, a senior Red Cross director.
Last year, the building sales included properties in Van Nuys and Burbank; the organization sold its former Wilshire Boulevard headquarters in 2005. In total, the organization has made about $30 million on the buildings, money that has been put into a local disaster-preparedness endowment, Nguyen said.
It was costing the Red Cross about $1.5 million a year to operate its buildings, and now it will cost the organization only about a third of that, $500,000, to lease five new facilities. The organization also bought a newer, more efficient headquarters building at 11355 Ohio Ave. in West Los Angeles.
Connecticut-based Lexham Private Investors LLC has purchased three buildings in the greater Los Angeles area in one year's time highlighting the real estate investment group's new commitment to the area.
In mid-January the firm closed on the purchase of a three-story, mixed-use building located at 224 E. Olive Ave. in Burbank. Lexham purchased the 27,035-square-foot building for about $5.3 million from Blue Real Estate, a Beverly Hills real estate investment firm.
The building is 100 percent leased and includes ground floor tenants such as RadioShack, said Bob Safai of Madison Partners, who represented both sides of the deal. The sale breaks down to about $196 per square foot.
"The rents that are in place are well below market and the buyer believes he will enhance the value of the real estate by increasing existing lease rates," Safai said.
In 2006, Lexham purchased medical office buildings at 3808 W. Riverside Dr. in Burbank and at 400 S. Sepulveda Blvd. in Manhattan Beach.
"We probably will continue to buy more assets, maybe three or four more properties in California," said Marc Lewis, managing principal of Lexham. "We see L.A. as a market constrained in terms of land and you have constantly a land grab in L.A."
Madison Partners is handling the leasing operations for all three of Lexham's Los Angeles area buildings.
Two law firms are swapping space at the Century Plaza Towers after signing lease deals late last year.
The firm Robins Kaplan Miller & Cerisi LLP signed a 10-year deal in November to relocate to the 34th and 35th floors of the plaza's 2049 Century Park East tower. Real estate sources with knowledge of the Century City market say the deal for 53,000 square feet is valued in the $25 million range.
"This transaction was below market by comparison to other similar sized transactions," said Brad Gross of tenant representation firm Equis Corp., who represented the law firm in the lease deal.
Gross said Robins Kaplan will make some minor renovations to its space in May when current tenant McDermott Will & Emery vacates it to move into the old Robins Kaplan office on the building's 37th floor.
As part of a 15-year lease renewal, McDermott Will has plans to occupy the 37th, 38th and 39th floors, said Jeff Lasky, a senior vice president for CB Richard Ellis Group Inc., who represented landlord One Hundred Towers LLC in both leases. "We are extremely pleased both firms made a long-term commitment," Lasky said.
McDermott Will's renewal is for a total of about 80,000 square feet and the value of the deal was not disclosed.
Jeff Pion of CBRE represented McDermott Will in its renewal. Mark Berman of Equis also represented Robins Kaplan. At the time of the lease deals, Lasky was with Trammell Crow Co., since acquired by CB Richard Ellis Group Inc.
Staff reporter Daniel Miller can be reached at (323) 549-5225, ext. 263, or email@example.com.
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