59.5 F
Los Angeles
Tuesday, May 24, 2022

Broadway Gets Another Beverly Hills Hit at Wilshire Rodeo

Broadway continues to play Beverly Hills. Broadway Real Estate Partners LLC has agreed to buy the Wilshire Rodeo office and retail complex in Beverly Hills for $151 million, according to sources close to the transaction.


If the deal is consummated as expected, it will represent Broadway Partners’ second Beverly Hills purchase this year. In June, the New York-based firm paid about $70 million for the 12-story, 110,000-square-foot office building at 9701 Wilshire Blvd.


Both purchases come less than six months after Broadway Partners hired L.A.-based Douglass Emmett & Co. acquisitions director Scott Sorensen to oversee the West Coast expansion.


Broadway Partners is buying the 237,000-square-foot Wilshire Rodeo at 9560 Wilshire Blvd. from the Florida State Board pension fund managed by Chicago-based real estate investment advisor Heitman LLC.


While Beverly Hills office rents are some of the highest in Los Angeles County, at $2.80 a foot in the third quarter, the city’s average office vacancy rate climbed to 13.5 percent, according to Grubb & Ellis Co.


The Florida State Board bought the building in 1995 from Citicorp Real Estate for $81 million. The building was once the headquarters of junk bond firm Drexel Burnham Lambert.


Today, the building contains 197,000 square feet of premium ground floor retail space leased to stores that include Nike and Burberry. Tenants in the overhead office space, which is nearly 90 percent leased, include UBS AG, United Talent Agency and Merrill Lynch & Co., among others.


Calls to Broadway Partners weren’t returned. The seller was co-represented by Eastdil Realty Co. and Secured Capital.



Condo Conversion


Falor Cos. has agreed to buy the 188-room Hilton Checkers hotel in downtown Los Angeles for about $28 million, according to sources briefed on the deal.


Chicago-based Falor owns mostly boutique properties that have been converted into condo hotels, where the rooms are sold to private investors but are rented out when the owner is away.

Falor has similar plans for the Hilton Checkers, located at 535 S. Grand Ave., sources said. Falor officials couldn’t be reached for comment.


Kor Group Inc., which owns the Viceroy in Santa Monica and the Sheraton Gateway LAX, among other properties, is in negotiations with Falor to take the hotel’s management contract from Beverly Hills-based Hilton Hotels Corp.


Lynn Kozlowski, a spokeswoman for Tarsadia Hotels, which owns the property, said the company wouldn’t comment.


Condo hotels have gained in popularity over recent years nationally, though few are operating in Los Angeles County, according to Neale Redington, national partner in charge of the hospitality division at Deloitte & Touche.


“It’s a fairly new concept,” Redington said. “It’s been very popular in New York but it’s just starting to pop up here in Los Angeles.”


At the price Falor is paying, the purchase would break down to about $150,000 per room, far above the $78,000 a room an unidentified investor is paying for the Hyatt Regency Los Angeles.


Political opposition to the sale is unlikely since condo hotels continue to pay city taxes on rented hotel rooms and they usually retain the existing workforce, which is still needed to run the hotel operation.


Typically, the hotel room owner and the property’s management company evenly split revenues derived from renting out the room, Redington said.


“The owner has a way to defray holding costs of the room,” he said. “And the hotel’s developer or manager finds people to use the rooms and generates fees for that service.”



Ocean Views


Trizec Properties Inc. is marketing the Shoreline Square office building in Long Beach.

The New York-based firm has hired Secured Capital to find a buyer for the 383,000-square-foot, 20-story tower, which sources said is likely to fetch more than $100 million. Trizec bought the building in 1995 for about $65 million.


The property is one of only three Class A office buildings in downtown Long Beach, brokers said. At that price, the property would trade for close to $260 a foot. Shoreline Square is located at 301 E. Ocean Blvd.


The building is about 85 percent occupied. The U.S. Customs and Border Protection Agency, the largest tenant, has 17 years remaining on its lease for 120,000 square feet.


Demand for office space in downtown Long Beach has been on the rise. Since the third quarter of last year, the average vacancy rate has dropped to 12.6 percent from 16.7 percent, according to Grubb & Ellis. Meanwhile, average asking rents have dropped 4 cents to $2.14 a foot.



Apartment Rents Rise


Average asking rents for apartment buildings in the San Fernando Valley rose by 4 percent in the third quarter from the year-ago period. Vacancy rates, meanwhile, held steady below 5 percent, according to data from RealFacts.


For a one-bedroom apartment, average asking rents rose by 4.6 percent in the third quarter to $1,154, according to the Novato-based research firm. Rents on two-bedroom, two-bath units rose 3.6 percent to an average of $1,504.


The Valley’s highest rent increases were in Northridge, where the average rental rose 6.9 percent to $1,248. In Reseda, average rents rose 6.2 percent from the year-ago period, to $1,011.



Brief Items


Adler Realty Investments, a Woodland Hills-based private investment and development firm, acquired a high-rise office building totaling 323,607 square feet in Phoenix for $16.8 million. Adler also acquired three office buildings in Orange totaling 107,352 square feet for $6.45 million … Shea Homes has opened a new master-planned community in Simi Valley. Castlewood at Big Sky features four- to six-bedroom homes at prices beginning in the low $800,000 range.


San Fernando Valley Business Journal reporter Shelly Garcia contributed to this column. Staff reporter Andy Fixmer can be reached at (323) 549-5225, ext. 263, or at

afixmer@labusinessjournal.com

.

Featured Articles

Related Articles