After building an empire of fast-food restaurants, Peggy and Andrew Cherng are taking on a different sort of building project: an apartment complex in Pasadena.
The couple, who co-founded Panda Restaurant Group, filed a preliminary plan in October with Pasadena and last month received design guidelines from city planners.
Cherng Family Trust, which is leading the project, has yet to submit a formal planning application. But David Luo, the trust’s vice president of real estate, said the plan is to construct two six-story apartment buildings with 258 units next to the Gateway Metro Center, an 11-story office tower.
The trust bought the office along with the apartment development site in 2015 for $44.5 million, according to public records. The Cherngs already own the Panda Inn restaurant next door – the company’s first location, opened in 1973 – and plan to renovate it.
The October filing with the city estimates the total cost of the apartment project and restaurant renovations at $40.7 million.
The Cherngs, who own a South Pasadena home but claim Las Vegas as their primary residence, said in September that their family office would incorporate investments and developments in commercial real estate. The trust soon made good on that pledge, buying the 300-unit Trio Apartments in Pasadena in November for $154 million.
“CFT views apartment units as a good investment in communities, especially one in which we have strong roots,” Luo said via email. “It is an honor to be able to invest in the Pasadena community.”
Eric Duyshart, Pasadena economic development manager, said the city welcomed the investment from a celebrated local family.
“The Cherng family has been a staple in the San Gabriel Valley for years,” he said. “The fact that their first restaurant is here in Pasadena is a great sense of pride.”
A large part of the fast-food business connects to real estate, said Patrick Donahue, chief executive of retail landlord Donahue Schriber Realty Group who brokered the first Panda Express lease in the early 1980s at the Glendale Galleria.
Towering Deal
West Hollywood’s Sunset Tower Hotel is on the market for roughly $100 million, according to a source familiar with the site. The transaction would become one of the few hotel deals in Southern California to vault over $1 million a unit.
The seller is ER Hollywood, an entity managed by New York investment advisory firm Elevated Returns, which purchased an 80 percent stake in the property for about $60 million in 2015, when the building was valued at $75 million.
L.A.-based hotelier Jeff Klein owns the remaining stake in the art deco tower, which is home to 81 high-end rooms and the tony Tower Bar and Restaurant.
Jones Lang LaSalle brokers Jeff Davis and Tony Muscio are handling the site, according to marketing materials.
ER Hollywood would be able to sell its stake alone or obligate Klein to sell his stake as well, the source said.
Klein declined to comment.
Under Klein’s ownership, Sunset Tower became a Hollywood hot spot, hosting Creative Artists Agency’s annual Golden Globes party and other A-list events.
Marina Moves
Ken Kahan, president of California Landmark Group in West Los Angeles, opposes Measure S, an initiative on the March 7 L.A. city ballot that would halt discretionary building for at least two years.
But even if it passes, Kahan isn’t too concerned about his company’s prospects because he said he always aims to build projects that don’t require planning variances.
The latest example is a 67-unit apartment building in Marina del Rey called R3 that opened in January. The project, which cost $30 million and was developed with Culver City’s Cayton Capital, aims to mimic the contemporary style of creative offices – and even features 6,000 square feet of actual office space rather than the storefronts usually found in mixed-use projects.
“I like the mix of having some creative people in offices, possibly living upstairs, and also utilizing our common areas,” including the pool, Kahan said. “We can offer something that a lot of creative office landlords can’t.”
Staff reporter Daina Beth Solomon can be reached at [email protected] or (323) 556-8337.
