The home of the Hollywood Reporter and Billboard has been sold.
New York-based real estate investor and developer Somerset Group paid $45.1 million July 30 for the 5055 Wilshire Blvd. office building owned by USAA Real Estate Co., a unit of San Antonio-based insurance company USAA.
"It's a sweet spot as far as pricing," said Gabriel Eshaghian, a principal and director of West Coast acquisitions at the family-run Somerset, which will have a regional office at the property. "It was a fair price for the kind of asset we are looking at. We believe in the long-term viability of the building as an investment and Miracle Mile is booming."
The Class A deal breaks down to about $265 per square foot. Eshaghian said that the nine-story building, renovated in 1990, needs few upgrades.
The 170,000-square-foot building is 97 percent occupied with 30 percent of the space taken by the Hollywood Reporter, Billboard, Adweek and other trade publications owned by Nielsen Business Media, which has a long-term lease.
Torrance Memorial Medical Center has leased 60,000 square feet of space next door from the hospital at the RREEF Torrance Campus.
The hospital will move offices into the 3120 Lomita Blvd. property by January. The July deal for the entire third floor of the building is valued at roughly $8 million and starts at $1.07 per square foot per month on a triple net basis.
RREEF North America, a San Francisco-based unit of Germany's Deutsche Bank's asset management arm, purchased the building in 2006 for $58 million because of its proximity to the hospital, said Dave Smith of CB Richard Ellis Group Inc., who represented RREEF.
The 572,000-square-foot, four-story building is 86 percent leased. The other tenants are L-3 Communications, which occupies about 340,000 square feet and Boeing Co., which occupies about 80,000 square feet.
CB Richard Ellis brokers Gregg Kirkpatrick and Phil Brodkin also represented the landlord while the hospital represented itself in-house.
Los Angeles-based office landlord Arden Realty Inc. is expanding and becoming the nationwide investment arm of parent GE Real Estate.
Arden, which has a 13.3 million-square-foot portfolio of 220 properties in the Western U.S., will lead acquisitions for the General Electric Co. unit, which purchased it in 2006.
"We truly do think it's a great opportunity, and we think it's a great time in the market as we go forward," said Michael Lynch, Arden's chief investment officer. "We think it is going to be a great time to be a buyer. Pricing is adjusting and there is a lull in transaction volume."
Since Arden's 2006 purchase, the company has closed about $6 billion in transactions half in acquisitions and the other half in dispositions, Lynch said.
As part of the restructuring, national office investment personnel from GE Real Estate Americas' Equity will be rolled into the Arden operation, with the combined units run out of Arden's West L.A. headquarters.
Lynch said the move wouldn't result in any senior management changes, though on Aug. 7, Robert Peddicord, Arden's chief operating officer, announced he was resigning.
An Arden spokeswoman said that move was unrelated to the company's expansion, which Peddicord seconded in a prepared statement. "Their national growth platform and joint venture focus signals a terrific new chapter at Arden. For me, it is time to pursue new interests and the next challenge of my career," Peddicord said.
News and Notes
Wilshire Christian Church has tapped BTG Advisors LLC as consultants for development of a 10,000-square-foot parcel behind the church at 643 S. Normandie Ave. Currently a three-story structure is on the site, but Richard Gentilucci of BTG said that the church would like to see a developer build a 14-story, 60,000-square-foot senior housing facility under a long-term ground lease. Killefer Flammang Architects is currently preparing a site plan Burbank developer Chandler Partners and Denver-based real estate private equity firm Amstar Group LLC jointly opened the Gardens at Wilshire, a six-story apartment project at 3675 Wilshire Blvd. The 159-unit project has apartments that start at $1,625 and top out at $3,475. Despite the down economy, 31 units have been leased since the July 31 opening, said Kim Sperry, executive director of Amstar.
Staff reporter Daniel Miller can be reached at firstname.lastname@example.org or (323) 549-5225, ext. 263.
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