Kearny Real Estate Co. has sold about half of its 2.6 million-square-foot Hawthorne industrial development for $40 million in Los Angeles County’s largest industrial deal this year.
Newport Beach investment firm Buchanan Street Partners and Zelman Development Co., a retail and industrial developer and investor based in downtown Los Angeles, bought the property April 28.
The property, adjacent to the Hawthorne Airport, was part of Kearny’s Century Business Center, a manufacturing facility that the Century City investment and development firm bought in July 2005 for $61 million from Vought Aircraft Industries Inc. in a partial lease-back deal.
Kearny sold the 43 acres of the center that were leased back by the aircraft company, which makes Boeing 747 fuselages. The other half of the property was redeveloped by Kearny, which has sold several industrial buildings and leased others.
Hoonie Kang, a partner at Kearny, said that his company owned the property with a Morgan Stanley real estate investment fund and decided to sell once Vought exercised an option to renew its lease for seven years in 2008. But it took a while because of the recession.
“Given how horrible capital markets were in the early part of 2009, we decided to hold off,” Kang said.
Kearny put the 1.4 million-square-foot project on the market in late summer 2009 for $41.5 million and waiting paid off. It had 17 offers and sold for $28.57 per square foot, said Jeff Kernochan of Fischer & Co., who represented Kearny.
“It was the best overall price,” Kernochan said.
Paul Casey, co-president of Zelman, said the price is “very justifiable,” particularly because of the development opportunities if Vought were to vacate. The company’s lease extends through 2015 and it can exercise an additional five-year renewal option.
“It’s almost unheard of to find a 43-acre site fully entitled for a wide range of uses in L.A. County,” Casey said.
Tim Ballard, president and chief investment officer of Buchanan, agreed but he expects Vought to exercise its option to stay.
Bill Palmer of Palmer Team Inc. also represented Kearny. The buyers were represented in-house.
Dollar Tree Inc., a Chesapeake, Va. -based discount retailer, is expanding in Southern California. The company recently signed leases for six new stores, including two in Los Angeles County.
Dollar Tree, which rivals the 99¢ Only Stores chain, signed five-year leases at 8790 Washington Blvd. in Pico Rivera and 3566 Rosemead Blvd. in Rosemead. In total, the transactions were valued at $1.5 million.
The leases are part of a recent West Coast expansion for the publicly traded company, which has more than 100 stores in Los Angeles and neighboring counties, said Scott Burns of Wilson Commercial Real Estate, who represented Dollar Tree in both deals.
The company’s Pico Rivera lease with landlord Vestar Development Co. is for 15,000 square feet. The lease in Rosemead with Rosemead Place LLC is for 10,000 square feet. Both retail centers are anchored by Target stores.
The Pico Rivera location opened in April and the Rosemead store will open in September. The leases were signed in mid-February.
Dollar Tree also was represented by Lea Clay Park of Studley in both deals. Bryan Norcott of Studley represented Vestar and Mike Edmundson of Retail Net Lease Properties represented Rosemead Place. Dollar Tree declined to comment.
Hans Mumper has left Grubb & Ellis Co. and joined Colliers International Property Consultants Inc., where he will oversee the firm’s brokerage business in the L.A. area.
Mumper, 48, will oversee about 50 brokers in three offices for the real estate services firm. He started the job in late April.
He had spent less than two years at Grubb & Ellis, handling management services in Southern California. Mumper’s new job is more in line with the sort of work he did previously with investment firms Bentley Forbes Group LLC and USAA Real Estate Co.
“It brought me back to the side of the business I do prefer – working with brokerage teams,” said Mumper, adding that one of his focuses will be hiring brokers.
In December, Colliers combined its operations with FirstService Real Estate Advisors, formerly the biggest independent group in the Colliers network.
Staff reporter Daniel Miller can be reached at firstname.lastname@example.org or (323) 549-5225, ext. 263.
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