As the credit markets worsen by the day and it becomes more difficult to obtain a commercial real estate loan, debt-assumption deals are becoming increasingly attractive. Two recent transactions highlight this trend.

A Los Angeles-based real estate investor in July sold an apartment building in Koreatown and another in Valley Village for a total of $9.48 million, with the buyers of each property assuming the debt. Even this spring, when the properties were listed, the debt would have been viewed as a drawback, said Darin Beebower of Madison Partners, who represented the seller in both transactions.

"At the time we went to market it was a bit of a disadvantage," said Beebower. "As it turns out now the assumable debt is quite attractive because of difficulties in the finance market. It was a blessing in disguise."

In the Valley Village deal, IMT Capital LLC, a Sherman Oaks multifamily investment company, paid $5.13 million July 15 for a four-story, 25-unit apartment complex at 12626 Burbank Blvd. The deal with Burbank Partners LP, the unidentified Los Angeles investor, breaks down to $205,200 per unit. IMT assumed $3.1 million in debt on the property.

In the July 28 Koreatown transaction, Cap Town LLC, a Southern California-based investor, paid $4.35 million for a four-story, 23-unit apartment complex at 321 S. Berendo St. The deal with the Los Angeles investor, doing business as 321 Berendo Partners LP, breaks down to $189,130 per unit. The buyer assumed $2.3 million in debt.

Beebower said the sales might have been helped by the fact that each building only had one vacancy and were generally attractive pieces of real estate.

"They don't require any significant renovations, but they both offered significant potential to add value through common-area improvements and interior-unit upgrades," said Beebower, who also represented the buyer in the Valley Village sale.

Charles An of Prudential Commercial Real Estate represented the buyer in the Koreatown deal.

Industrial Lease

Brookvale International Corp. has signed a lease at ProLogis Park Torrance that will take all the remaining space at the 1.1 million-square-foot business park.

The Long Beach logistics company took 425,600 feet at 19700 Van Ness Ave. Terms were not disclosed, but Pat Maloney, a first vice president with owner ProLogis Inc., called it a market-rate and long-term deal.

Brookvale will use the space for third-party logistics, and Maloney said that the building will upgraded in the coming month, with the work expected to be completed by January. ProLogis is building offices for Brookvale and the logistics company is installing a racking system.

"It's a great location; it's a great building," said Maloney, who represented ProLogis in-house. "It's also a large block of space which is very hard to find in this type of location."

ProLogis, based in Denver, is the largest industrial REIT in the world. Brookvale also leases 271,000 square feet at a ProLogis property in New Jersey.

Furniture Deal

Virco Mfg. Corp., a Torrance-based publicly traded manufacturer of school furniture, has signed a five-year lease extension at its headquarters.

The deal for 559,000 square feet at 2027 Harpers Way, which also serves as a manufacturing and distribution center, is valued at $19.1 million. Virco makes everything from wooden desks to folding tables and auditorium seats.

"It's everything you and me sat in at school," said Todd Taugner, a broker with Klabin Co. who represented both sides in the Aug. 26 transaction with landlord AMB Property Corp., a San Francisco-based industrial real estate investment trust.

Virco already has been at the property for more than a decade. The lease extension begins in 2010 with the rate escalating annually.

"It's a recommitment to the area," said Taugner. "This building was built originally as a furniture manufacturing facility. It's a perfect building for their use."

Taugner said Virco has made many improvements to the building over the years. The property includes 50,640 square feet of office space and about 425 people work there.

Taugner said that Virco and AMB approached the negotiation cooperatively. AMB has decided to pay for a new roof, while Virco will handle other upgrades.

David Prior of Klabin also represented both sides of the transaction.

Staff reporter Daniel Miller can be reached at or (323) 549-5225, ext. 263.

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