In what is believed to be the biggest industrial real estate sale in the San Gabriel Valley this year, a large industrial building in City of Industry has traded hands for $15.3 million.
The 296,960-square-foot building at 500 S. Seventh Ave. was purchased in June by American Paper & Plastics Inc., a food packaging supplier, which will occupy the building. The seller was iStar Financial Inc., a New York real estate investor.
The transaction is yet another example of the rise of owner-user sales, which have become increasingly common as companies look to take advantage of depressed pricing and low interest rates. In turn, owner-users often pay a premium over investors, making the deals attractive to sellers.
Broker Jeremiah Curry of Global Commercial Real Estate, who represented the buyer, said that his client was looking to purchase property because it had outgrown an El Monte facility it leases. The City of Industry location will serve as American Paper’s headquarters and warehouse facilities, and it will vacate its El Monte digs.
The current tenant at the City of Industry building is custom closet manufacturer Closet World Inc., which only has a few months left on its lease. While American Paper will occupy the building after that, Curry said, American Paper might allow Closet World to continue to lease a portion of it, though those plans haven’t been finalized.
The sale breaks down to $52 per square foot. Broker Kevin Shannon of CB Richard Ellis Group Inc., who represented the seller, said the sale price was indicative of the typical premium that owner-users pay over investors. He said American Paper made the highest offer of three owner-users.
Shannon said the price represented a modest premium over what investors offered. He declined to cite specific amounts.
Curry said he considered the deal “market rate.”
David Fults and Todd Tydlaska of CB Richard Ellis also represented the seller. Frank Lahijani of Global Commercial Real Estate also represented the buyer.
American Paper and iStar did not return calls seeking comment.
Law Firm Lease
Law firm BuckleySandler LLP has inked a 10-year lease for 11,967 square feet at 100 Wilshire Blvd. in Santa Monica. The firm moved into its new offices last week, leaving behind 2,293 square feet at 1801 Century Park East in Century City. The $7 million lease with landlord Douglas Emmett Inc. closed in late June.
Exact terms of the deal, which started Aug. 1, were not disclosed. But broker Matt Perlmutter of CB Richard Ellis said that it started at about $4 per square foot per month with annual escalations.
Perlmutter, who represented the law firm, said his client wanted to move to Santa Monica, and considered 100 Wilshire to be the marquee property in the area.
“They are in the process of growing and they were crammed for space in their current location,” said Perlmutter, who is handling the sublease of BuckleySandler’s Century City office. “We looked at one space in Century City, but we were really focused on moving to Santa Monica.”
The 20-story Class A office building – the tallest in Santa Monica – offers expansive views of the sand and ocean. The firm occupies the building’s 10th floor.
A start rate of about
$4 per square foot per month is in line with the market. Santa Monica is among the priciest office markets in Los Angeles County; the average
asking rent for Class A space in the second quarter was $4.16 per square foot per month.
Eric Olofson of Cushman & Wakefield Inc., who represented Douglas Emmett, said the building is now 97 percent leased.
Clint Rockwell, BuckleySandler’s managing partner in Los Angeles, said that his firm liked the space because it required minimal remodeling.
Ben Gary of CB Richard Ellis also represented the law firm. The landlord was also represented by Scott Menkus of Cushman & Wakefield.
Staff reporter Daniel Miller can be reached at [email protected] or (323) 549-5225, ext. 263.
