A 204-unit downtown L.A. luxury apartment building has changed hands for $62.5 million, a sales price that was boosted by rising rental rates and strong interest in the property.
About 20 bids were placed for the Canvas L.A. building, put on the market in September by Alliance Residential Co. LaSalle Investment Management, a subsidiary of Chicago real estate services company Jones Lang LaSalle, won with an offer that breaks down to $360 per square foot.
Phoenix-based Alliance developed the 173,686-square-foot building at 138 N. Beaudry Ave. The property opened in 2008 amid the housing bust, which didn’t skip downtown, where thousands of condo units were constructed.
Many of the units were converted into apartments, depressing average rental rates about 60 cents below the $2.80-per-square-foot rate Canvas L.A. was getting, said broker Laurie Lustig-Bower, an executive vice president with CB Richard Ellis Group who represented both sides in the sale.
However, as the property was being marketed last year to prospective buyers, the downtown rental market strengthened, drawing more interest in the building. Bids were due Oct. 13; the sale to LaSalle was completed in mid-December.
“The market is still on the soft side, but I think it’s improving as opposed to getting worse,” she said.
The apartments command monthly rents of about $2,200 for a 764-square-foot one-bed, one-bath unit. Three-bed, two-bath units of 1,956 square feet go for $4,933 per month.
Alliance founding partner Bob Hutt said the proceeds will likely go toward an acquisition elsewhere as the commercial real estate market is stabilizing.
Brokers Tyler Anderson and Sean Cunningham, based in CB’s Phoenix office, and Adrienne Barr and Kadie Presley, of CB’s Beverly Hills office, also represented both sides in the sale.
A representative of LaSalle declined comment.
Short-Term Gain
The bankruptcy of the proposed Bundy Village & Medical Park has been bad news for developer Michael Lombardi and his Stonebridge Holdings Inc.
The developer placed the planned 1 million-square-foot mixed-use complex at Olympic Boulevard and Bundy Drive into Chapter 11 in November after stiff opposition made it difficult to obtain financing.
But Lombardi’s troubles have been good news for Rubicon Project, an Internet advertising company that is a tenant of the existing office complex on the West L.A. property.
Bundy Village would require razing the office buildings. But in the interim, while Lombardi figures out how to move forward with his project, Rubicon’s lease was extended for about 30 months. The firm also added 30,000 more square feet at 1933 S. Bundy Drive, next to its 24,000 square feet at 1925 S. Bundy.
“Rubicon has been an excellent tenant,” said Lombardi, president of Stonebridge. “To the extent that we have any further delay or disruption in the development process, we’d probably extend the lease again.”
Financial details of the lease with Westside Medical Park LLC, the bankrupt development entity of which Stonebridge is managing partner, were not disclosed.
Craig Roah, chief operating officer and founder of Rubicon, said Stonebridge’s setbacks means the 250-employee company can stay put and grow.
Rubicon is housed on a parcel that would be the last to be razed. Bundy Village project, which could cost as much as $500 milion, would include medical offices, retail/commercial space, and market-rate and affordable senior housing residential units. About 40 percent of the project would be open and green space.
Stonebridge represented itself in the transaction. CresaPartners’ Brian Davies and Dave Toomey represented the tenant.
Route 66 Deal
Commercial real estate information service provider LoopNet Inc. is moving from Monrovia to Glendora, having signed a seven-year lease for new Southern California offices.
Industry sources value the 38,590-square-foot lease at roughly $7.5 million. LoopNet Chief Financial Officer Brent Stumme said that was too high, but declined to disclose a dollar figure.
The deal was driven mostly by the company’s desire to be on one floor as it expands. The publicly traded San Francisco-based company will occupy the entire second floor of a two-story office building at 2100 E. Route 66.
LoopNet, with about 100 local employees, occupies two floors totaling less than 24,000 square foot space at 181 W. Huntington Drive. It’s expected to move before June 30.
The Glendora space has been vacant since May 2009 when a technology tenant downsized and moved out.
R. Todd Doney and Nico Vilgiate of CB Richard Ellis Group represented the tenant. Norm Sauvé of Sauvé Riegel Inc. represented the landlord.
Staff reporter Max Zimbert can be reached at [email protected] or at (323) 549-5225, ext. 263.
