A two-acre redevelopment site in downtown has changed hands for $18.5 million.
The property includes two Class B medical office buildings at 1111 and 1125 W. 6th St. and an adjacent parking structure in the Central City West neighborhood.
The buyer was TC Fund Property Acquisitions Inc., an entity of Trammell Crow Co.'s investment arm; the seller was Sixth Street Capital Investors LLC, run by managing member Gary B. Blackwell. The deal closed Jan. 8.
The 1.9-acre parcel is adjacent to the Good Samaritan Hospital. Last summer, the nearby hospital sold off a four-acre redevelopment site for $45 million. Plans for that location have not yet come forward. Anything from a hotel to more medical offices could be built on the Sixth Street parcel.
"For the amount of land that is there, it is not maximized out," said Adam Tischer, an associate with CB Richard Ellis Group Inc. who represented the buyer. "As far as what's built, it's 25 percent utilized."
At the moment, the medical office buildings are 97 percent leased. Kevin Tamura of Daum Commercial Real Estate Services said most of the tenants at the property are locked into leases with early termination clauses that allow the landlord to vacate the building relatively quickly to make way for redevelopment.
"The question is the highest and best use," said Tamura, who represented the seller.
Tischer said the fact that the building is nearly full leased provides for "a very safe way into a development deal. You could wait until the next cycle."
A representative of Trammell Crow did not return calls seeking comment.
Mark Tarczynski of CB Richard Ellis also represented the buyer; James Tagliere of Excel Real Estate Management Consultants Corp. also represented the seller.
Medical Office Deal
A medical office development site in Santa Monica has traded hands for $13.25 million, or $442 per square foot.
Local commercial developer Arnon Development Group Inc. bought the 30,000-square-foot parcel from Spruce Realty Group and plans a 50,000-square-foot medical office building. The site between Wilshire and Santa Monica boulevards at 1223 16th St. is across from Santa Monica UCLA Medical Center.
The project lacks the necessary entitlements to move forward, but the developer is working with the city of Santa Monica to get them, said Gary Weiss of Madison Partners, who represented the buyer.
Currently, there are three vacant buildings at the property. They would be demolished to make way for the new project. Plans call for ground breaking in the second quarter of 2009.
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