A 200,000-square-foot San Pedro retail complex known as Park Plaza was the first shopping center to trade hands this year when it sold for $62 million last month.
An affiliate of real estate investment company First Washington Realty Inc. in Bethesda, Md., bought the property at 800 N. Western Ave. for its estimated market value from Regency Centers, a publicly traded real estate investment trust in Jacksonville, Fla.
Built in 1962, the center sits on 13 acres of land and is 95 percent leased to retailers, which include Sprouts, CVS and Ross Dress for Less.
Regency acquired the property with an equity partner for $28.8 million in 2001, but this year realized the center had a “decent amount of equity” and decided to take advantage of market momentum, according to Kyle Miller, managing director of Studley Inc.’s national retail service group in downtown Los Angeles, who represented the seller.
“In the beginning of the year, there wasn’t a lot of product and there was significant demand for institutional core assets,” Miller said. “It was the perfect time for Regency to be a seller.”
First Washington was one of 20 bidders.
“They came through heads above everyone else,” Miller said.
First Washington is planning to upgrade the center and attract new national tenants to the property. The company has 16 other properties in its California portfolio and is working to expand its holdings in Southern California.
Bill Bauman, Studley’s executive vice president, also represented the seller. Regency represented itself in-house.
Data Deal
Financial market data company Interactive Data Corp. has renewed its Santa Monica lease after an exhaustive search for new offices with a backup generator.
The Bedford, Mass., firm signed a five-year deal for nearly 23,000 square feet at the Santa Monica Business Park, at 2901 28th St., with landlord Equity Office Properties Trust. Financial terms were not disclosed but industry sources estimate the deal at about $4.5 million.
The company has been in its location for at least a decade but had been struggling recently with power blackouts and brownouts as its services grew. Its current lease expires in December, so last year it began looking for new space that would provide an external generator.
Interactive Data began negotiations with another nearby landlord but wasn’t able to secure a short-term lease. The company may consolidate its offices into one location in the future and wanted the flexibility to move in a few years. Equity Office offered a favorable lease term and provided the company permission to install a backup generator.
Craig Kish, a broker at Jones Lang LaSalle Inc., represented Interactive Data. Kish said the lease speaks to the popularity of Santa Monica for tech companies.
“Santa Monica amenities and proximity to its employee base really can drive the decision for staying there,” he said.
Gil Ohls of Jones Lang LaSalle in New York also represented Interactive. The landlord was represented in-house by Gail Goldstein as well as Deron White of CBRE Group Inc.
Not-So-High Tech
The hype over just how much high-tech companies are driving local real estate rent growth may not sound as impressive when compared with other cities, according to a report released by Jones Lang LaSalle this month.
Nationwide, high-tech employment is growing at 5.2 percent annually, which is three times faster than total employment and two and a half times faster than professional services. That growth is leading more high-tech companies to occupy more office space in cities around the country, the report said.
But it notes that overall Los Angeles isn’t seeing the same kind of high-tech office space growth as the top five fastest-growing areas for high tech, in order of growth: Silicon Valley, San Francisco, Boston, Seattle and New York.
First quarter rents in markets with a high concentration of tech companies jumped nearly 60 percent in Silicon Valley and almost 30 percent in Boston compared with the previous year. In Los Angeles, the increase was 0.9 percent.
Why isn’t Los Angeles benefiting the way other cities seem to be?
Blake Searles, a broker with Jones Lang LaSalle who works with the high-tech industry here, said he has a few ideas.
“Labor and the cost of doing business are determining factors,” Searles said. “Some other cities might be more business-friendly. (They have) close proximity to investment, private equity and venture capital – and that’s a huge driver in Northern California.”
Staff reporter Jacquelyn Ryan can be reached at [email protected] or (323) 549-5225, ext. 228.
