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Developer in Koreatown Feels Bite of Slow Market

The profit that a Koreatown apartment building brought to a Beverly Hills-based real estate investor may look solid, but the company says the downturn in the real estate market robbed it of the bigger payday it had hoped for.

Multifamily investor StarPoint Properties LLC sold an 83-unit apartment complex at 737 S. Kingsley Drive for $17.3 million. The buyer was NF Hawaiian Gardens LP, an entity of local developer Decron Properties Corp. The deal closed June 13.

StarPoint purchased the property in August 2006 for about $12 million and spent $1 million renovating the property, said StarPoint Chief Executive Paul Daneshrad, who added that his company had planned to hold the complex for two years and hoped to sell it for about $19 million.

“We still did well with the asset,” he said. “We didn’t expect this kind of slowdown in the marketplace. There are not a lot of transactions happening so buyers are scarce. It’s got to be a compelling property. If it’s not, it won’t sell today.”

The property was put on the market in March when StarPoint finished renovations. The remodel included upgrades to the exterior, lobby area, pool and gym. Also, travertine floors and granite countertops were installed in the apartments. The property was 95 percent occupied at the time of sale.

“We like the location of the property,” said Mark Wiesenthal, executive vice president at Decron. “We like where it is positioned in the marketplace it is at the high-end of the marketplace. It’s our first deal in Koreatown but we are bullish on the community and would like to do more.”

Wiesenthal said that his company is considering more upgrades for the complex, including in-unit washers and dryers.




Warehouse Work

An extensive renovation of a 15-acre Rancho Dominguez industrial property has paid dividends for First Industrial Realty Trust Inc., the Chicago-based REIT that purchased the property at 3015 Ana St. a little over a year ago.

The company demolished three buildings, or about 150,000 square feet of space, and turned the land into truck parking. The remaining building was renovated, with an exterior dock added to the 213,000-square-foot structure.

And in a deal that began May 1, DHL/Exel Inc., a unit of the express delivery and logistics company Deutsche Post AG of Germany, paid $12.9 million for a five-year lease at the site.

Todd Taugner of brokerage Klabin Co. said that First Industrial’s renovations chiefly the demolition of the buildings were done to attract a logistics company. DHL/Exel will use the remaining building for long-term warehousing and parcel distribution while the vast acreage will provide space for truck parking.

Taugner represented both sides of the transaction, which he described as market-rate.

About 100 people will work at the site. DHL/Exel now has plans to vacate a building it currently uses in Long Beach and will sublease that space, Taugner said.

Frank Schultz of Klabin Co. also represented both parties and David Bales of Klabin also represented the landlord.


New Brokerage

Down market be damned, residential real estate veteran Scott L. Gibson has started a new high-end brokerage. The Brentwood company, called Gibson International, opened June 23 with an office at 11538 San Vicente Blvd. It’s already got 11 brokers on board and has sold six properties.

Gibson is a former senior vice president at Coldwell Banker parent NRT Inc. and also has worked at Prudential Jon Douglas Co. and Fred Sands Realtors. He said the six sales show there is still room for growth in the high-end market in West L.A. despite trouble in the credit market and depressed prices across the board.

“It is tougher, but the Westside is an international market and it’s a place where the world’s moneyed elite have to have a place,” he said.

Gibson did not have specific information on the six sales, but said the average price of homes his company brokers is $1.5 million.

Gibson comes to L.A. from Parsippany, N.J., where he was in charge of the northeast region for NRT. He will be competing toe-to-toe with Coldwell Banker for listings.

“I will compete hard but friendly,” he said.


Staff reporter Daniel Miller can be reached at

dmiller@labusinessjournal.com

or (323) 549-5225, ext. 263.

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