The Jefferson at Hollywood apartments sold this month for $132.5 million, just a few years after Essex Property Trust picked up the property for $120.5 million.
Apartment investor Redwood Urban and Beverly Pacific, a family office of Guess Inc.’s co-owners, are the buyers, said Curtis Palmer, executive managing director at ARA Newmark, who represented all parties in the deal. ARA Directors Chris Benton, Jaspaul Kapoor, and Chris Tresp assisted on the transaction, which priced the building at $490,740 a unit.
Redwood and Beverly Pacific plan to spend up to $6 million on refurbishments, after which they intend to bump up rents, Palmer said. The monthly rents currently hover about $2.68 a square foot. After renovations, Palmer estimated the rates could increase by as much as 30 percent.
It won’t only be fancier swimming pools and common area amenities adding to the value of the Hollywood property at Highland Avenue and Yucca Street. Demand to live in Hollywood is growing, Palmer said.
That trend is partially following the growth of the office market, which has brought new projects such as Columbia Square, Icon, 959 Hollywood, and 1601 Vine St. In two particularly high-profile moves, Viacom Inc. is moving to Hollywood from Santa Monica and Netflix Inc. is relocating from Beverly Hills.
“That’s 4,000 to 5,000 new jobs, and those people need to live somewhere. Most of them, although they make good incomes, cannot afford a home in the Hollywood Hills,” Palmer said. “There’s just such a huge disparity between the cost of renting and owning.”
The growing demand to be in Hollywood is what contributed to the $12 million price hike between 2013 and now – a time in which Essex did little in the way of renovations, he said.
It could mean that the time is right for investors to look at buying, sprucing up, and flipping apartment complexes built roughly between 2005 and 2010. Even the more recent buildings would likely benefit from updated countertops, flooring, and lighting fixtures, Palmer said.
With 270 units, the Jefferson sits near the intersection of Hollywood Boulevard and Highland, walking distance to a light-rail stop, the El Capitan Theatre, and Hollywood Bowl.
Inglewood Improvements
Developer Sandy Sigal says his latest project in Inglewood isn’t just about location, location, location, it’s about people.
“I love Inglewood,” said Sigal, president of NewMark Merrill Cos. “I love the people there. I love the way we’ve been able to work with the city. You’ve got a super-appreciative community who really embraces positive things.”
The positive thing he’s been pursuing lately is a $15 million renovation of the 304,755-square-foot Crenshaw Imperial Plaza shopping center located just over 3 miles from the Los Angeles Rams’ stadium under construction at Hollywood Park.
Begun in 2015, Sigal’s project will replace one of the aging buildings, bring in new tenants, improve the project’s infrastructure, and substantially renovate a pair of discount stores. The incoming tenants include Planet Fitness, Save-A-Lot, Chipotle, Five Guys, and Ono Hawaiian BBQ, courtesy of deals brokered by CBRE’s Richard Rizika and Mitchell Hernandez. Mission View Charter School will lease 15,000 square feet in a renovated office building at the center.
Sigal was attracted to Inglewood long before it seemed possible that the Rams would come to town.
“For all I knew, the stadium was going to be in Carson or downtown,” he said. “We build a lot in communities that are underserved but have good demographics. If you build a good product, people will be loyal.”
While he said the stadium won’t likely have a big impact on Crenshaw Imperial Plaza, he expects the national name recognition of Inglewood will help a variety of projects in the area to secure financing or attract tenants.
Multifamily Planning
Canyon Partners Real Estate is opening the curtain on the third act of its multifamily investments. Through a partnership with Pasadena’s CIT Bank, the Century City investment venture has launched the Canyon Multifamily Impact Fund III, backed by $90 million.
The fund will specifically target the acquisition of apartments in Southern California that serve low- or moderate-income residents. It will also devote resources to property improvements as well as education and health care programs ranging from after-school tutoring to sports events. Canyon and CIT have already dedicated $500 million to similar investments, purchasing more than 3 million square feet of apartments in 3,700 units.
“We are particularly proud to participate in this innovative structure that will rely upon private, not government, funding to serve our community’s needs,” Rick Lieber, CIT’s senior vice president, said in a statement.
Staff reporter Daina Beth Solomon can be reached at [email protected] or (323) 556-8337.
