A $52 million office building sale, the year’s largest in Los Angeles County, closed this month in Pasadena.
Grosvenor USA Ltd. sold an 11-story building and two smaller structures at 2 N. Lake Ave. to an entity of Arcadia-based developer and investor Singpoli Group. The 225,647-square-foot transaction breaks down to $230 per square foot.
While the square-foot price is lower than what similar Class A buildings traded for during the boom, the deal is noteworthy because the property attracted institutional buyers, such as pension fund advisers that have largely been on the sidelines, said broker Kevin Shannon.
“What was encouraging about this deal is we had 14 offers, and several parties were institutional buyers,” said Shannon of CB Richard Ellis Group Inc., who represented the seller.
Grosvenor USA, the U.S. arm of commercial real estate company Grosvenor Group Ltd., has been selling properties over the past year.
“We’ve been selectively selling assets in various markets in order to have cash available for opportunities as they arise over the next 12 to 36 months,” said Tina Colacino, investment manager for Grosvenor USA.
Singpoli believes it got a great deal. The property is at the corner of Colorado Boulevard and Lake Avenue, across from a retail property in the company’s portfolio.
“This project is Main on Main and location is very important to us,” said Singpoli managing director Kin Hui. The company has plans to redevelop its retail property across the street into a mixed-use development with a hotel, offices and retail. “With the price we purchased it at, it’s a very good deal.”
Shannon said that it would cost more than $400 per square foot to build such a property.
In addition to the 11-story building, constructed in 1985, the property includes a small building that houses a salon and the 20,337-square-foot Lieberg Building, a historic property constructed in 1926 that housed Pasadena’s first department store.
Singpoli represented itself in-house. Grosvenor also was represented by Todd Tydlaska, Kevin Duffy, Carlton Maese and Damon Feldmeth of CB Richard Ellis Group.
San Pedro Sale
Two apartment developments in San Pedro have changed hands for a total of $37.3 million in one of the county’s biggest multifamily sales of the year.
The seller in the Sept. 10 transaction was Chicago-based real estate investment trust Equity Residential, headed by real estate mogul Sam Zell, and the buyer was multifamily investor JH Real Estate Partners Inc. of Newport Beach.
The properties are about a street block apart, with the 160-unit Harbor View at 1286 W. Capital Drive and the 60-unit Bay Ridge at 1099 W. Capital. The buildings were built in the 1980s and are not subject to rent control. However, given the economy, there currently is little opportunity to raise rents, said Ron Harris, a Marcus & Millichap Real Estate Investment Services Inc. broker who handled both sides of the deal.
“The buyer is a long-term holder,” he said. “Over time they will have an opportunity to renovate and update the building.”
Greg Harris of Marcus & Millichap, unrelated to Ron Harris, also represented both sides.
Both Equity Residential and JH Real Estate did not return calls seeking comment.
Bankrupt Project
A downtown high-rise being built by troubled developer Meruelo Maddux Properties Inc. will move forward despite the project’s bankruptcy, the company maintains.
Meruelo Maddux-845 S. Flower Street LLC, a legally separate entity that controls the 705 W. Ninth St. development, filed for Chapter 11 protection Sept. 3. But the building will be complete next month and ready for occupancy in November, said company spokesman Michael Bustamante.
“The market continues to be a difficult place and things did not turn as quickly as we’d like,” he said. “It was unfortunate but the appropriate thing to do.”
Meruelo Maddux has secured three deposits for leases and is current on payments to the lender, an affiliate of Century City real estate investment manager Canyon Capital Realty Advisors LLC, Bustamante said.
According to the bankruptcy filing, the limited liability corporation’s 20 largest unsecured creditors, mostly contractors, are owed more than $7.5 million.
The filing follows Meruelo Maddux
Properties’ own Chapter 11 bankruptcy petition in March after it was unable to make payments on $266 million in debt. The company is likely to file a reorganization plan in November.
Bobby Turner, managing partner of Canyon Capital, declined comment because of legal concerns.
One-bedroom apartments at the 214-unit property start at $2,248 per month and penthouse units begin at $6,800.
Staff reporter Daniel Miller can be reached at [email protected] or (323) 549-5225, ext. 263.
