Bell Gardens Lease is Latest Buy For New York Group
by Danny King
Apollo Real Estate Advisors has joined with Dallas-based P’OB Montgomery & Co. in the $10.5 million purchase of the ground lease for the Bell Gardens Marketplace. The partnership acquired the remaining 68 years on the 80-year lease with the City of Bell Gardens from San Diego-based REIT Burnham Pacific Properties Inc.
The 160,000-square-foot retail center is about 90 percent leased. Anchor tenants are Food4Less and Rite Aid.
The center, located on Eastern Avenue just north of Florence Avenue and just east of the Long Beach (710) Freeway, was the last of 14 properties and long-term leases the joint venture bought from Burnham Pacific, whose shareholders voted to liquidate in December 2000. Total value of the transactions was $130 million.
Burnham Pacific has just two remaining centers in the region, Ventura’s Central Plaza and Inglewood’s Crenshaw Imperial Shopping Center. A deal for the latter is pending, according to CB Richard Ellis Managing Director Anthony Buono, who represented Burnham Pacific on the Apollo/P’OB deal.
“We believe that location serves not only the immediate market but a much wider population due to its proximity to the freeway,” said Richard Mack, partner at Apollo Real Estate Advisors. Rents at the 30-tenant center range from $1.50 to $2.40 per foot per month, he said.
The $66 a foot paid was 25 to 40 percent less than the cost for a comparable center inclusive of the land, according to retail broker Chris Maling, senior director at Marcus & Millichap.
New York-based Apollo’s most prominent local venture is the 770,000-square-foot Sunset Millennium project in West Hollywood. The company has taken over the operational duties of that development after the departure of Maefield Development last month.
“P’OB is the managing partner,” said Mack of the Bell Gardens venture. “We are generally set up as a financial partner. We generally don’t take control.”
South Bay Allure
As part of an ongoing effort to increase its presence in the South Bay, the Chicago-based First Industrial Realty Trust bought two industrial buildings totaling 450,000 square feet at Rancho Dominguez Industrial Park for $20.2 million. The fully occupied buildings, located at 19914 Via Baron and 2035 Vista Bella Way, are the largest in the company’s 2.5 million-square-foot South Bay portfolio.
“They were solid, functional, well located industrial buildings that we felt would serve the strongest tenant base in the South Bay, which is port-related and warehousing operations,” said Tim Gudim, managing director with First Industrial.
The deal, the company’s second in Rancho Dominguez this year, reflects the growing activity in a South Bay industrial region that encompasses LAX and the Long Beach and Los Angeles Ports, as well as part of the Alameda Corridor. Sale and leasing activity for the first quarter of 2002 was 2.7 million feet, up from 1.8 million square feet for the year-earlier quarter, according to Grubb & Ellis Co.
First Industrial pursued the deal despite an existing $10 million mortgage on the property that can not be paid off in advance and is “a lot higher than market,” according to Grubb & Ellis’ Kevin Shannon, who, with Michael Moore and Jeff Smart, represented both the seller, Stanton Investment Co., and the buyer.
“The biggest challenge on the deal was the existing debt,” said Shannon. “But they liked the deal because they like the South Bay.”
eUniverse Inc., the Los Angeles-based Internet content company, has agreed to sublet 25,000 square feet from Vivendi Universal Games at Howard Hughes Center. Financial terms for the 45-month sublease were not disclosed, but real estate sources estimate the deal to be worth $2.2 million.
“Vivendi had recently completed a corporate restructuring, which created excess space,” said CRESA Partners’ Dave Toomey, who, with Brian Davies, represented Vivendi. Vivendi takes about 160,000 square feet in the Arden Realty Group-owned building, according to Toomey.
Meanwhile, eUniverse will be nearly doubling its space from its home of two-years at 6300 Wilshire Blvd.
“It’s high growth mode for these guys,” said CB Richard Ellis associate and eUniverse representative Joe King, who added that the opportunity to be on a single floor was also a draw.
EUniverse’s plans to acquire online media company L90 Inc. were called off last month after the Securities and Exchange Commission began an investigation on the Marina del Rey firm’s revenue-keeping practices.
Old and New
The product may be recycled but the headquarters will be brand new.
Pomona-based America Chung Nam bought 3.5 acres of land in the City of Industry and has begun construction on two office buildings totaling 60,000-square-feet. The total investment for the complex, which is located at 1163 – 1169 Fairway Drive just south of the Pomona (60) Freeway, will house the company’s new headquarters, was about $10 million.
The company, which specializes in buying used paper products for recycling into boxes and packaging material at its paper plant in mainland China, will occupy 30,000 square feet and will lease out the rest.
“We are experiencing a 30 percent growth rate every year,” said Stephen Lo, manager at America Chung Nam. Lo also noted that the easy freeway access the site is also about two miles from the Orange (57) Freeway.
The zoning on the property, which was owned by Majestic Realty Co., was changed by the city from manufacturing to commercial in order to facilitate the deal, according to Shan Lee, executive vice president for Daum Commercial Real Estate Services and representative for the buyer.
Staff reporter Danny King can be reached at (323) 549-5225 ext. 230, or at