Talk about a big day.
Real estate broker Bob Safai of Madison Partners closed three deals, totaling some $180 million, on June 26 at a time when even power brokers like himself are having off years.
Still, Safai who represented Arden Realty Inc. in the largest sale, and a buyer of Arden property in another bemoaned that the real estate market has slowed so much that even his record day left him short of last year’s pace.
“The credit crunch has affected the investment sale market. Last year we were doing four or five deals a month,” said Safai, a Madison principal who largely handles big transactions. “It feels good, but you are still off from last year.”
The Los Angeles-based brokerage has so far this year handled about $400 million in sales, which would be a solid showing for most local independent brokerages. But through this time last year, it had totaled more than $1 billion in sales.
Safai’s big day is not his personal best. A couple of years ago, he closed about $800 million worth of deals in one day.
The Arden business stems from the real estate company’s purchase in 2006 by GE Real Estate, a unit of General Electric Co. GE is still reconfiguring the local portfolio assembled by Arden founder Richard Ziman before the $3.2 billion sale.
In the first deal, Arden sold Class A Culver City office buildings at 400 Corporate Pointe and 600 Corporate Pointe to Transwestern Real Estate for about $125 million. Transwestern Real Estate is the investment arm of Houston-based Transwestern Commercial Services.
Safai, who represented both sides of the deal, said that Culver City has become a more desirable submarket in recent years, adding, “It is growing and getting more tight.”
The buildings total 440,000 square feet and are 93 percent occupied in total, with the deal breaking down to about $284 per square foot.
In the second deal, Arden sold an office building at 10351 Santa Monica Blvd. to a partnership of real estate investment groups Angelo Gordon & Co. LP and Cambra Real Estate.
The 100,000-square-foot, 91 percent-occupied building sold for about $35 million, or $350 per square foot. Safai represented the partnership; Eastdil Secured LLC represented Arden.
“It’s just outside of Century City; it is a nice building,” said Safai, who added it’s a “Class A-minus” asset. “They are going to play the upside in the rents.”
Angelo Gordon & Co. and Cambra Real Estate have acquired other assets from Arden in recent years, including in 2006 when they purchased a 120 S. Spaulding Drive office building in Beverly Hills. The partnership sold that property earlier this year for a record per-square-foot price.
Another Safai Deal
In Safai’s final June 26 transaction, he represented both sides in the $19.5 million sale of a Class A research and development facility in Anaheim.
The seller was a partnership led by Los Angeles commercial and residential developer J.H. Snyder Co. The buyer was an undisclosed high net-worth Los Angeles real estate investor who completed the deal under the 901 East Ball LLC name.
The 118,975-square-foot facility at 901 E. Ball Road sits on just over seven acres and is fully occupied by L-3 Communications Holdings Inc., which makes satellite systems. The company has a long-term lease at the property.
J.H. Snyder and partners purchased the building in 2006 and added a new roof in 2007. The partnership had long planned to sell the property after two years, said Drew Planting, a partner with J.H. Snyder.
Increased L.A. traffic and rising gas prices are changing the way small businesses warehouse their goods.
Martin J. McDermott, a broker with Grubb & Ellis Co., said that some businesses located in L.A.’s heart are looking to purchases warehouses closer to their shops or offices to cut down on drive times and fuel costs.
In particular, McDermott said the Hollywood area where he just brokered a sale has become attractive to local businesses with its stock of older, small industrial buildings.
In a transaction that closed May 30, siblings Isack Fadlon and Orna Amzaleg purchased a Hollywood industrial building for $2.65 million. The pair owns Sportie L.A., a trendy sneakers and apparel store with three Melrose Avenue locations. The company has vacated a downtown L.A. warehouse and has moved into the new building.
“Skyrocketing retail rents converge with increasing drive times and it essentially urges retailers to rethink how they use their space,” said McDermott, who represented seller Colony Bancorp of Malibu, which owns several Hollywood buildings.
The 10,113-square-foot industrial building at 6235 Santa Monica Blvd. includes office space in addition to 6,400 square feet of warehouse space.
At about $262 per square foot, the deal would appear to be an extreme high for an industrial sale, but McDermott said that price reflects its small size and Hollywood location.
Zack Rozio of Faldon & Rozio Lawyers represented the buyer.
Staff reporter Daniel Miller can be reached at firstname.lastname@example.org or (323) 549-5225, ext. 263.