As Venice and Playa Vista swell with businesses and residents, investors are looking outside those borders to catch the spillover.
“You’ve got a natural progression,” said Gardner Ellner, a downtown L.A.-based acquisitions director for CBRE Global Investors. His firm just bought Univision’s building at the Howard Hughes Center in Westchester for $102 million, about twice the amount Univision paid for the five-story site in 2004. The Spanish-language broadcaster will lease back its space, but leave two floors vacant for new tenants. One of those tenants could pick up signage on the parking lot overlooking the busy 405 freeway, said Ellner. In addition, CBRE plans to make the building especially inviting by upgrading the lobbies and patios.
Ellner expects the space to look attractive to companies that couldn’t break into Playa Vista, either due to high rents or lack of space.
“Playa Vista is built out. It’s totally leased,” he said.
Marina del Rey is also grabbing attention. A 51,400-square-foot lot on Glencoe Avenue, home to an auto shop and surfboard company, just sold for $17 million. The buyer, a local limited liability entity, plans to build creative offices topped by apartments. Steven Schechter, an associate vice president for investments at Marcus & Millichap’s Encino office who brokered the sale, said he was able to bump up the price by $1 million because of high demand for the property, which is just east of Lincoln Boulevard.
“It’s all a function of what’s going on in Silicon Beach,” he said. “As more tech comes in, you’ve got more and more people that are ancillary to that industry, and everybody wants to work close to where they live.”
At $331 a square foot, the price was the highest paid for land on Glencoe since 2012.
A Beverly Hills building has switched hands for just under $38 million in a rare sale for the Golden Triangle shopping zone. The site, at North Canon Drive and Santa Monica Boulevard, was sold by Brentwood-based Vintage Capital Group. The buyer was not disclosed.
Tenants include restaurant Il Tramezzino, pet care shop Pussy & Pooch, and several beauty salons – DryBar, Yoshi Hair Studio, Chi Nail Bar & Spa, and Valerie Beverly Hills Makeup Salon.
Vintage had owned the site for about 25 years before deciding the time was right to sell, said its broker, Stephen Algermissen of Colliers International.
“They felt that the market was just so strong that they could achieve a premium price and that’s what they did,” said Algermissen. “It is a very strong number in that marketplace.”
The nearly $38 million price tag translates to about $2,122 a square foot for the 17,908-square-foot site. According to CoStar Group Inc., retail buildings in Beverly Hills sold for an average of $2,867 a square foot last year. But prices can skyrocket just blocks away. On the much coveted Rodeo Drive, Chanel bought its store in December for $152 million, or $13,217 a square foot.
The buyer at Canon might choose to bump up rents, which currently fetch about $10 a square foot. That might be pricey compared with other parts of West Los Angeles, but a steal compared with $75-a-square-foot rates on Rodeo.
Constructed in 1936 with art deco flourishes, the building was brought up to date in 2000 and then again in 2013.
The buyer plans to continue leasing to the existing tenants. Jay Luchs of Newmark Knight Frank and Jerry Asher of Asher Commercial assisted Colliers in the sale.
With one $191 million deal, Rexford Industrial Realty Inc. has bumped up its holdings by more than 12 percent. The Brentwood real estate investment trust bought 1.53 million square feet across Southern California in acquisitions spanning Orange County, San Diego, and the Inland Empire. Its largest purchase, a 325,800-square-foot building, is in the San Gabriel Valley. Monthly rents for the fully leased properties range from 35 cents to 93 cents a square foot, according to documents filed with the Securities and Exchange Commission.
“The portfolio … brings greater scale and operating efficiency in key infill submarkets,” said Howard Schwimmer and Michael Frankel, co-chief executives of Rexford, in a statement.
The deal comes as industrial markets across Los Angeles hit record-low vacancies, with manufacturing, consumer goods, apparel, and logistics companies snatching up space. The average vacancy rate in Los Angeles County is an extremely tight 1.2 percent.
Staff reporter Daina Beth Solomon can be reached at firstname.lastname@example.org or (323) 549-5225, ext. 237.
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