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Wednesday, Feb 8, 2023

Quellos Sets Year’s Price Record in Center West Deal

Quellos Sets Year’s Price Record in Center West Deal

Real Estate

by Danny King

So much for the downward pressure on rents.

Financial services firm Quellos Group LLC is taking 8,500 square feet on the 22nd floor of the Center West building in Westwood at what’s believed to be the highest price per square foot signed this year. The firm will be moving to the 23-story tower from its temporary offices at Santa Monica’s Water Garden next month, according to Josh Maag, associate at Quellos.

While details were not disclosed, the 10-year lease at 10877 Wilshire Blvd., which traditionally has garnered some of the highest rents in the city, is said to be worth in excess of $6.5 million, with a starting rate of about $5.50 a foot.

“They were only considering the top two buildings,” said Cushman & Wakefield Inc.’s Ness Hamaoui, who, with Arlene Sommer, represented Quellos on the deal. “They looked at the penthouse at Fox Plaza (in Century City) and Center West, and ultimately chose Center West.”

Kam Hekmat, president of Center West landlord Indivest Inc., did not return calls.

The deal far outstrips the $3.25 a foot Grubb & Ellis Co. listed as the average asking rate for Westwood during the second quarter.

It also trumps the deal Saban Capital Group Inc. signed for its penthouse space at 10100 Santa Monica Blvd. in Century City in April. Saban is paying $4 a foot for 24,000 square feet in the 26-story building.

Center West’s tenants include Rosewood Hotels & Resorts and Merrill Lynch & Co.

Santa Monica Flipper

Less than two years after buying the Parkside Medical Center in Santa Monica, Kennedy Wilson Inc. is unloading.

The Beverly Hills-based real estate fund manager sold the two-building, 62,000-square-foot complex to L.A.-based SCI Investments Inc. for $21 million, realizing $4 million more than it paid. The complex at 2336 and 2428 Santa Monica Blvd., 30 percent of which is occupied by UCLA, is fully leased.

Kennedy Wilson bought the property in September 2000 for $17 million, when Parkside was 86 percent leased.

“We rolled some of the lower leases up to market,” said Mary Ricks, senior managing director at Kennedy Wilson who, with Clifford Smith, represented the seller. “We were able to turn it for a nice profit.”

The older of the two buildings, 2448 Santa Monica Blvd., was built in the 1920s and renovated when 2336 Santa Monica Blvd. was built in 1988.

The purchase was one of two recent major buys for SCI. The company also purchased the 70,500-square-foot Woodland Hills Village shopping center for $8.8 million.

Re/Max Commercial’s Marc Paul and Robert Robotti represented SCI in the Parkside deal.

Valu-able Property

K.V. Mart Co. is getting out while the getting’s good.

The Carson-based grocery company, whose operations include Top Valu Markets and Valu+ Food Warehouse, sold Lawndale Marketplace for $10.8 million. The 88,000-square-foot property at 15202 Hawthorne Blvd. is fully leased and anchored by a 30,000-square-foot Valu+.

The sale is part of the company’s effort to divest from its Southern California property portfolio in order to grow its two brands. Including the Lawndale site, the company has sold three shopping centers totaling 182,000 square feet in recent months. The 40-year-old center, which includes a Sav-on and Payless ShoeSource, sold at less than a 10 percent capitalization rate.

“They’re expanding their grocery business, and they’re using the funds to do that,” said Chris Thompson, vice president of Investment Real Estate Associates who represented both sides of the deal. “They got a good cap rate.”

The buyer is an affiliate of Creative Properties, a syndicate of Westside investors that owns seven shopping centers throughout Southern California.

Rich Getting Richer?

While many economists and real estate experts are expecting prices for high-end homes to lead the way if and when the local housing market cools off, luxury home prices reversed their flattening trend during the second quarter, according to a survey released Aug. 20.

Los Angeles area luxury home values went up after two consecutive quarters of decline, according to a report by San Francisco-based First Republic Bank. Based on a survey of sales in Beverly Hills, Malibu, Pasadena and other communities, prices increased 2.5 percent from the first quarter and about 1 percent from the year-earlier quarter.

The reversal can be attributed to a combination of low interest rates, a falling stock market and entertainment industry buyers who continue to buy expensive homes, according to Katherine August-deWilde, chief operating officer at First Republic.

“The entertainment industry remains strong, and it has not showed any signs of problems,” said August-deWilde, adding that “some people are putting equity in housing market in lieu of other equity markets.”

The uptick may be an aberration, though, as continued stock market volatility wreaked havoc on the finances of high net individuals, said August-deWilde.

“The growing (housing) inventory coupled with the nervousness of the summer may not bode well for the third and fourth quarter,” said August-deWilde. “I see flatness.”

The median price of a home sold in Los Angeles County in July was $266,000, up 15 percent from the like period a year ago but a $3,000 drop from June 2002. The survey’s results match the earlier findings of real estate tracking firm DataQuick Information Systems, which has projected that as the housing market cools off, high-end homes will plateau first.

Movin’ Out

Architect Frank Gehry will be moving his firm’s offices from Santa Monica to about 46,000 square feet in a 70,000-square-foot Playa Vista-adjacent building at the end of the year.

The move is a component of Beverly Hills-based NSB Associates Inc.’s $9.5 million purchase of 12541 Beatrice St. from the Hoffman Foundation. The 33-year-old building has been empty since BMW moved out about a year and a half ago.

Staff reporter Danny King can be reached at (323) 549-5225 ext. 230, or at

dking@labusinessjournal.com.

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