Though new lease transactions are slowing, tenants are renewing at a fast pace as landlords cut deals to keep them amid the slow real estate market.
Shims Bargain Inc., a Los Angeles import-export company, recently renewed its lease in Commerce for five years at a rate well below third quarter average asking rents. The general merchandiser took 267,500 square feet at its 7026-7030 Slauson Ave. distribution center.
The $7.5 million renewal with landlord AMB Property Corp. of San Francisco started Nov. 1 at 45 cents per square foot per month on a triple net basis. The rent increases every two years by 6 percent, said Dave Hess of CB Richard Ellis Group Inc., who represented AMB, an industrial real estate investment trust.
By comparison, the average third quarter asking rent for Mid-Cities industrial space was 59 cents per square foot per month, according to Grubb & Ellis Co.
Shims has been a tenant at the Chartwell Distribution Building for four years.
“(Renewals have) kind of continued unabated, even through the slowdown,” said Hess. “Landlords are reaching out further and further in advance of lease expiration to get deals done.”
Mike Foley of CB Richard Ellis also represented the landlord. The tenant was represented by Ken Coward of Colliers International.
Countrywide Sale
Bank of America Corp. disposed Nov. 7 of its first piece of real estate owned by Countrywide Financial Corp., the faltering mortgage lender the Charlotte, N.C., bank bought in July.
DTS Inc., an Agoura Hills sound technology company, finalized its $15.6 million acquisition of a three-story building at 5220 Las Virgenes Road in Calabasas that housed the lender’s Countrywide Home Loans Inc. unit.
The deal, which breaks down to $182 per square foot, fell into place in September.
“It’s a very good price for an (occupied) building,” said Lyn Fields, a principal at Madison Partners hired by Countrywide to market the property before the Bank of America merger was complete. said. “This isn’t the best market in the world. You have no financing.”
The home loan unit’s legal and accounting departments will occupy the building until January through a lease-back deal. Then DTS plans to upgrade and establish its headquarters at the building, where it also will consolidate area offices.
“They had been in the market for some time, so it was a pretty good fit for them,” said Gary Weiss, another Maidson Partners broker who represented Countrywide.
There were higher-priced offers on the property, but DTS was selected because it is a public company that bought all cash.
“If it had been a third-party or speculator it would have been very hard to close because of the lack of loans,” Weiss added.
The 85,948-square-foot building near the Ventura (101) Freeway sits on 6 acres of land and has a 347-space parking lot. It was built by Lowe Development in 1999.
Countrywide still owns over 1 million square feet of office space in the Conejo Valley area. “They haven’t made any decisions if they are going to dispose of any more,” Fields said.
Carlo Brignardello and Matthew Miller of Cresa Partners represented DTS.
Apartment Sale
A 29-unit garden-style apartment building at 8160 Redlands St. in Playa del Rey has changed hands in a cash and debt-assumption deal.
Husband and wife real estate investors Trudi and Robert Bogert of Los Angeles paid $5.99 million, or $206,724 per unit. The seller of the 39-year-old property was the Krantz Family Trust of Los Angeles.
The three-story building, which includes a mix of studios and one- and two-bedroom apartments, is 100 percent leased and rent controlled.
The average rental rate is $1,275, said Christopher Malcolm of Coldwell Banker Commercial NRT, who represented the seller.
The property was first put on the market in January and two previous deals fell through when the capital markets tanked. The Bogerts were able to close the deal Oct. 15 because they paid cash and assumed the existing Fannie Mae loan on the property, Malcolm said.
Michael Marechal represented the buyer.
Staff reporter Daniel Miller can be reached at [email protected] or (323) 549-5225, ext. 263.
