Developer Sonny Astani has sold a Koreatown apartment building for $11.5 million to billionaire real estate investor Donald Sterling – with plans to use the proceeds for a new downtown L.A. project.
The 66-unit building at 457 S. Manhattan Place fielded 17 bids, but Sterling was able to close the deal quickest. Astani said he met with Sterling, who bought the building in cash after a 90-minute meeting.
The sale comes as Astani readies to sell his Concerto condo project in downtown after a lengthy battle with Starwood Capital Group. The investment firm owns the construction loan on Concerto after purchasing part of the portfolio of Corus Bank, which was seized by regulators and was Astani’s original lender.
The $11.5 million in proceeds are only a fraction of what Astani would need for his latest plan: a two-building, high-rise condo complex at Eighth Street and Grand Avenue. The property, now a parking lot, is already entitled for 900 units. Astani said the project would be further funded by proceeds from the stalled Concerto project, which he would like to sell for $200 million (netting less once various encumbrances are paid).
A combination of factors, including available construction financing and a pickup in downtown condo unit sales, means it’s time to build again, he said.
“You have all these elements happening at the same time; on top of it, it’s an L.A. market that’s healthy with rentals,” he said. “I don’t see things going though the roof in several years, but there’s enough for professionals who are their own builders.”
Neither Sterling nor a representative of the Sterling Family Trust returned calls seeking comment. Ron Harris of Marcus & Millichap represented the buyer and seller.
New Lease on History
Owners of the historic and last standing building that once housed a Brown Derby restaurant have scored two 10-year lease deals with tenants.
The deals are some good news for Hillhurst Los Feliz LLC, which bought the property at 4500 Los Feliz Blvd. in 2004 as a tear-down. However, its plan to build a mixed-use residential building was dashed when a preservationist group successfully appealed for a historic and cultural designation.
There were four Brown Derby restaurants that were hot spots in the ’30s and ’40s with Hollywood luminaries. The original on Wilshire Boulevard, and two others in Hollywood and Beverly Hills were demolished.
Adler Realty Investments Inc., a Woodland Hills real estate investment firm that is the managing partner of Hillhurst Los Feliz, recently signed a 10-year lease with Chase Bank, which will open a 5,800-square-foot branch. The deal is valued at $2.8 million. Italian restaurant Louise’s Trattoria, a longtime tenant, also renegotiated its 5,200-square-foot lease in a 10-year deal worth $2.3 million, said Duncan Lemmon, a principal with Lee & Associates, who represented the landlord in both transactions.
The Derby, a restaurant and nightclub that played off the original name and previously occupied Chase’s space, moved out about one year ago, he said.
The property is being further divided to make more than 2,000 square feet of space for a third retail tenant along Hillhurst Avenue. Lemmon said he’s already fielded interest from prospective tenants.
“It’s being renovated at this point with restoration on the exterior and a new roof, air conditioning – all the components to re-tenant the building and bring it up to today’s standards within the historical guidelines,” Lemmon said.
Tim Bower, a senior vice president at CB Richard Ellis, represented Chase.
Zag.com Inc., an online car sales company, has signed a lease to move into a new 17,261-square-foot headquarters in Santa Monica just down the street from its current space.
The move was necessary to house the growing five-year-old company, which expects to add employees next year, said founder and Chief Executive Scott Painter.
“Even though the economy’s been bad and the auto business has been off, we have been booming,” he said.
Through Zag, buyers can purchases cars for a discounted fixed rate from a network of participating dealers. The company also runs online car-buying services for other companies and affinity organizations, such as various American Automobile Association clubs.
Zag plans to leave its 10,000-square-foot space at 525 Broadway and move into its new space at 120 Broadway before Feb. 1.
Painter said he wanted to find a larger space that is close to the amenities of Santa Monica and the company’s other offices at 225 Santa Monica Blvd.
A dollar figure for the deal was not disclosed.
Douglas Emmett, owner of 120 Broadway, was represented in-house by Bob Zelken. Jones Lang LaSalle’s John Ghiselli and Craig Kish represented the tenant.
Staff reporter Max Zimbert can be reached at email@example.com or at (323) 549-5225, ext. 263.
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