Good Samaritan Hospital has sold a full city block in Central City West near downtown Los Angeles for $45 million.
Buyer Holland Partners of Vancouver, Wash., plans to build a large residential community at the 4.1 acre parcel bounded by Wilshire Boulevard, South Bixel Street, West Sixth Street and Lucas Avenue. The deal closed on July 17.
The Business Journal first reported that the hospital had put the property on the market in December.
Holland, which has developed a nearby residential property called GLO, plans to build a mixed-use project that includes market rate, affordable and workforce housing at the former hospital property, in addition to at least 40,000 square feet of commercial space.
"We believe that the geography and location of Central City West is conducive to a neighborhood," said Tom Warren, president of Holland. "It's proximate to downtown but also slightly removed from the real frenetic activity of the business district and the stadium (Staples Center) district. We think there is a real appeal for a residential neighborhood that isn't quite as crazy as those areas."
The hospital-adjacent parcel, which features several structures that would likely be razed for the development, lacks entitlements. The site includes a parking lot, warehouse and a nine-story building that Holland is considering keeping at the site.
Holland outbid 12 other groups for the property, which is just west of the Harbor (110) Freeway. The deal breaks down to a market rate $252 per square foot.
Mark Tarczynski, a senior vice president at CB Richard Ellis Group Inc., said that Central City West is an acceptable alternative to downtown living for those who still want to be close to the center of the city. About 2,500 housing units have recently been built in the area, and another 1,000 are under construction and 2,500 more are planned.
AEW Capital Management LP and Fannie Mae's American Community Fund are equity partners on the deal.
Meanwhile, Good Samaritan Hospital plans to use the proceeds from the sale to build a seven-story medical office building next to another medical office building the hospital owns nearby.
"Even though we sold our property to (Holland), I consider them partners," said hospital President Andrew Leeka. "The sale of this property will allow us to expand and grow within the health care business."
Leeka said the building should be completed in the next 30 months.
Concerto in Full
Real estate developer Sonny Astani's twin-tower Concerto condo project is back on track.
In November, the developer told the Business Journal he was shelving plans to build one of two 30-story luxury towers at Ninth and Figueroa streets. At the time, Astani cited high construction costs and a slowing condo market.
But Astani's company, Beverly Hills-based Astani Enterprises Inc., has secured new funding and the developer's own success downtown has bolstered his decision to build the project as he initially envisioned it.
Astani said that he dropped former lender Fremont Investment & Loan earlier this year when parent Fremont General Corp. became embroiled in the subprime meltdown.
"That got me concerned," said Astani, chairman of Astani Enterprises. "We had to pause, rethink that and we started with a new lender."
The 835,000-square-foot project's new lender, Chicago-based Corus Bank, has provided Astani Enterprises with a $190 million loan.
Though the project experienced a six-month delay and construction at the site currently a large dirt pit slowed to a halt, the break gave Astani time to reassess the project.
"The delay was unfortunate but it had plus sides," Astani said. "We were able to do a lot of value engineering. We were able to also sign contracts with various vendors."
Earlier this year, Astani sold out another new downtown condo project, Vero, at 1234 Wilshire Blvd. The developer says his company sold the mid-market building's 200 units in about 90 days.
Astani added that sales figures at other high-end downtown projects that Concerto would compete with show there is a market for units in the $1 million range.
In total, the project will include 624 units and about 25,000 square feet of retail space.
Construction began again at the Concerto site in mid-June.
Cushman & Wakefield Inc. has been tapped by real estate investment and development firm Bixby Land Co. to manage 37 office, industrial and retail properties in Los Angeles, Orange and San Diego counties.
The Newport Beach-based company's portfolio, which totals 3.4 million square feet and stretches into the Inland Empire, includes 1.3 million square feet of office space and 1.6 million square feet of industrial property. Most of the 600,000 square feet of retail space is in Long Beach. Cindy Burger will manage the portfolio and Cindy Osmundson will supervise the office component.
Staff reporter Daniel Miller can be reached at firstname.lastname@example.org or (323) 549-5225, ext. 263.
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