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.
Weiss said there is significant demand for medical office space.
"There is no new development for medical office in the last year or so, and the medical that is up right now from Beverly Hills to Santa Monica is very tight," said Weiss.
Arnon has experience with developing medical offices. It recently built the Parnell Medical Plaza, an 18,000-square-foot building in West L.A. fully leased to dialysis company DaVita Inc.
John Mudgett of Madison Partners also represented the buyer. The seller was represented by Dennis Ellman of law firm Greenberg Glusker LLP.
Polo Ralph Lauren Corp. will open a Ralph Lauren store on Robertson Boulevard after inking a 10-year lease deal for 10,900 square feet in the hip retail corridor.
The deal at 135-143 N. Robertson Blvd. closed Jan. 1. The landlord is an unnamed family trust. The lease rates were not disclosed, but the average rental rate is said to be about $20 per square foot per month. Polo plans an extensive $6 million upgrade of the space, with the store opening in June.
"It should have a really beautiful fa & #231;ade," said Charles Jacob of A.J. Morgan & Co., who represented the landlord. "It is going to reflect the Ralph Lauren image. A lot of things right now on the street just have glass fronts with not a lot of character. This is going to have a lot of character."
Polo bought out the lease of the former tenant at the property, Hideaway House Antiques Inc. As the trendy strip of Robertson becomes pricier, more national tenants are moving onto the street and often buy out the leases of existing local businesses. In the last few years, the street has become a haven for celebrities and paparazzi alike.
Matthew May of May Realty Advisors also represented the landlord. Polo was represented by Robert Cohen of R.K. Futterman and Associates.
In another deal on the street, the retail building at 154-156 S. Robertson Blvd. has been sold to a private New York investment group for $10.5 million. The sale closed Jan. 30.
The seller was the Egan Family Partnership. There are two tenants at the building BCBG and boutique Diavolina. Both tenants are locked into below-market, long-term leases at the property, said Jacob, who represented the seller.
The property is on the southern end of the strip of Robertson between Beverly Boulevard and West Third Street a location that just a few years ago was considered less desirable.
"When we first leased the building, before the market took off, we had some challenges because it is at the end of the block," said May, who also represented the seller. "Now that the whole street has changed, the perception of it being a lesser location has gone away."
The 6,100-square-foot building, which includes a mezzanine level, was renovated three years ago. The building has 4,400 of ground-floor space, and on a ground-floor basis the deal is valued at $2,386 per square foot. Cohen represented the buyer.
Staff reporter Daniel Miller can be reached at firstname.lastname@example.org or (323) 549-5225, ext. 263.
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