In one of the largest retail property sales in the San Fernando Valley this year, the Fallbrook Center mall’s Wal-Mart and Burlington Coat Factory buildings were sold last month.
A private family trust purchased the 250,000 square feet of properties at 6433 Fallbrook Ave. in West Hills for $25 million from Fairbanks Equity Ltd., which developed the properties as part of the mall in the mid-1980s.
The total price was the third highest in the Valley this year after only the sale of four power center properties at 19350 Nordhoff St. in Northridge for $90 million and the sale of the former Montgomery Ward department store property at 14665 Roscoe Blvd. in Panorama City for $25.6 million.
General Growth Properties Inc. owns nearly all of the 75-acre, 880,000-square-foot open-air Fallbrook Center but Fairbanks had owned the Wal-Mart and Burlington properties, as well as some land under a Ross Dress for Less store.
Yubin Tao, vice president at Investment Real Estate Associates in Encino, who represented both sides in the deal, said having strong credit tenants such as Wal-Mart and Burlington, which both hold long-term leases, made the properties desirable for the buyer. The high price related to the properties’ strong capitalization rate, or the rate of return based on net operating income produced by a property divided by its capital cost.
“For the buyers, it was a solid cap rate and the sellers obviously had a lot of equity in the property and had inflow of capital for another site,” he said. “So it was a win-win, I think.”
The new owner plans to continue to operate the buildings as they are.
Beverly Hills’ Omninet Capital LLC bought a historic Hollywood apartment complex designed by famed modernist architect Richard Neutra last month.
Omninet, the investment vehicle of billionaire Neil Kadisha, purchased the 43-unit, four-story building at 5128 Marathon St. near Paramount Studios for $3.3 million, or $76,744 a unit, from an L.A. family that has owned it since 1993. The all-cash transaction closed within five days.
The total and per-unit sales prices are among the lowest in the neighborhood this year, according to CoStar Group Inc.
Once called the Jardinette Apartments but now known as the Marathon Apartments, the unembellished design, industrial construction and overall openness made it a notable architectural landmark when it was built in 1929 and earned it a spot on display during the Museum of Modern Art’s 1932 “Modern Architecture” exhibit. It was listed in the National Register of Historic Places and as Historic-Cultural Landmark in the City of Los Angeles in the mid-1980s.
Though it remains fully occupied, the property has fallen into disrepair over the last two decades. Monthly rates in the rent-controlled studio, and one- and two-bedroom units range from $615 to $1,298.
Brent Sprenkle, associate partner at Hendricks & Partners who represented both sides in the deal, said that its dated condition contributed to the low price.
“You don’t see too many historic landmarks that sell for distressed pricing – the rest always sell for premium dollars,” he said. “It was a really unique property. (Neutra) was a high-profile architect.”
Omninet plans to spend at least $400,000 to renovate the property and “bring it back to what it was.”
Kadisha, who made his fortune in telecommunications, ranked No. 34 on the Business Journal’s list of Wealthiest Angelenos in May with a reported net worth of $1.2 billion. His firm has been paying cash for underperforming properties of at least 50,000 square feet and valued at more than $5 million around the Southwest and California. This will be its ninth acquisition in Los Angeles since last year.
A portion of former Rydell Chevrolet car dealership in Sherman Oaks has become a CVS Caremark Corp. pharmacy location.
LandMark Retail Group, a subsidiary of Woodland Hills’ Newmark Merrill Cos., completed the development of the $3.5 million, 12,830-square-foot retail building for the pharmacy at 5601 Van Nuys Blvd. this month.
Owned by Rodrigues Holdings LLC, the 1.23-acre site is the only portion of the former dealership that’s been redeveloped since it was closed two years ago. CVS signed a long-term ground lease for the property in April 2010 and LandMark began construction late last year.
This is the 15th CVS property that LandMark has developed in Los Angeles County since 2011.
“We are proud to have transformed a location that was an abandoned auto dealership into a full-service CVS that will serve the community of Sherman Oaks for years to come,” said Holly Grzywacz, LandMark’s chief operating officer and director of development.
Staff reporter Jacquelyn Ryan can be reached at email@example.com or (323) 549-5225, ext. 228.
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