Two office sales this month indicate Santa Monica’s real estate market, a hot spot for tech companies, isn’t cooling off.
West L.A. real estate management and development company Korda Group bought a 37,000-square-foot building for $12 million from Sandstone Properties Inc., a Westwood private-equity group that focuses on real estate.
The building, at 2121 Cloverfield Blvd., boasts a large atrium and office suites with vaulted ceilings and skylights, but it’s 31 years old and just 72 percent leased. Yet it sold for $323 a square foot, the second highest rate among comparable buildings on the Westside within the last 12 months, according to CoStar Group Inc.
“Prices are hiking up dramatically. Santa Monica is the hottest submarket on the entire Westside. The reality is there’s only a finite amount of property by the ocean,” said Bob Safai, a partner at West L.A. brokerage Madison Partners, who represented Korda in the deal.
“The tech boom has helped it a lot. Tech and entertainment want to be in the area and most of the (company) owners live there and want to be there,” he said.
Studley Inc. broker John Bertram represented Sandstone.
Also selling last month was a 27-year-old building that houses film postproduction company Deluxe Entertainment Services. Downtown L.A. real estate investment company RPM Investments Inc. bought the building at 1222 Sixth St. for $4 million from Ascent Media Property Holdings LLC, a subsidiary of Ascent Media Corp.
Deluxe, which moved into the 7,500-square-foot building last year, pays about $200,000 in rent annually and has a lease that expires in 2015, with a five-year option.
Safai also represented Ascent Media.
Acme Furniture Inc. is consolidating and expanding into new City of Industry warehouse and manufacturing space.
The household furniture maker began moving into its 500,000-square-foot digs at 20002 Business Parkway this month after signing a five-year lease with landlord Majestic Realty Co. Industry sources said the lease is valued at $13.5 million.
Acme, headquartered in a nearby City of Industry office building, will occupy the entire 20-year-old light industrial building that had previously been home to Menlo Worldwide Logistics.
Acme already owns about 325,000 square feet of industrial space in the area that it is keeping but it is giving up 200,000 square feet it leases at two buildings nearby. It had been seeking the additional space because its business is expanding and it needs room for light manufacturing, according to Adam Dzierzynski, vice president of brokerage Lee & Associates City of Industry, which represented the company.
The lease also demonstrates how properties that can accommodate expanding companies in the City of Industry are bouncing back. During the height of the recession, companies were signing leases for 20,000 square feet at most, Dzierzynski said.
“I’ve noticed in the last year or two, more of the bigger-box –100,000 square feet and up – properties are the ones that are desirable,” he said.
Majestic represented itself in-house.
George Garfield, West Coast president for Transwestern, has been tapped to co-lead the brokerage’s new partnership with BNP Paribas Real Estate, part of Paris financial services firm BNP Paribas Group.
Garfield, who is based in downtown Los Angeles, will maintain his current position but also join Mark Doran, the Houston brokerage’s chief operating officer, in providing strategic guidance to the venture.
The partnership will put Transwestern brokers to work finding U.S. offices for BNP’s clients from 30 countries around the globe. It also will give Transwestern the ability to access BNP brokers to find offices for its U.S. clients abroad.
Garfield and a team at the brokerage had been working on the deal with BNP for nine months before it closed this month.
“Our clients have said, ‘We like what you do in the United States for us, and we’d like you to do that outside the United States for us,’” Garfield said. “What they get from us in Houston, our clients will (now) get from us in Mumbai, (India).”
Staff reporter Jacquelyn Ryan can be reached at firstname.lastname@example.org or (323) 549-5225, ext. 228.
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