By ELIZABETH HAYES
Staff Reporter
In a further sign that heady times have indeed returned to residential real estate, Fred Sands Realtors recently opened several new offices.
The new locations include Glendale, Topanga Canyon, Hancock Park, and Hacienda Heights where independently owned offices bought the franchise. In addition, the firm’s Malibu office has moved into larger digs, giving it double the square footage.
Sands, the company’s founder and president, confirmed that the expansion is tied to the resurgent economy and housing market.
The new offices are just the latest in a string of openings. The company has more than doubled its number of offices in the last four years, going from 23 to 55, said Sands, making it the nation’s fourth-largest residential brokerage company. Sands has also expanded into Northern California and plans to continue expanding throughout the state.
The new offices are already affecting the company’s productivity. Its Southern California sales volume is up 30 percent so far this year, Sands said. “We’re growing very rapidly,” he said. “We feel the public wants to deal with a company with an individual running it.”
Beverly Hills grocery
Beverly Hills’ prospects for more office space and a new supermarket got a little more likely with J.H. Snyder Co. announcing plans to develop a Gelson’s with three floors of offices above and three levels of parking below. The project is planned for an empty lot on Crescent Drive between Wilshire Boulevard and Clifton Way, where Snyder has a 75-year lease.
Office space in that part of Beverly Hills is tight, with a 7 percent vacancy rate, said Jerry Snyder, managing general partner.
Supermarkets are even more scarce.
“There used to be two or three grocery stores here and they have all disappeared as land values got higher and higher,” said Bernard Briskin, chairman and president of the Arden Group, Gelson’s L.A.-based parent company. He said the proposed market should draw shoppers from the eastern end of the city, people who currently drive to Century City for groceries.
Capital infusion
Kennedy-Wilson Inc. had a double dose of big news last week, with a major capital infusion from Colony Capital Inc. and an acquisition of Heitman Properties.
Kennedy’s $26.2 million in new financing came from Colony’s purchase of $21 million of subordinated debt and $5.2 million to purchase 440,085 newly issued common shares.
Colony a private, international real estate-related investment firm based in L.A. now owns 10 percent of the outstanding common stock of Kennedy-Wilson. Colony’s chairman and chief executive, Thomas Barrack Jr., will join Kennedy-Wilson’s board.
Kennedy-Wilson’s acquisition of Heitman will create a new property management division called Kennedy-Wilson Properties Ltd. Kennedy-Wilson is moving its offices from Santa Monica to Heitman’s offices in Beverly Hills.
Real estate sources valued that deal at about $20 million.
“It’s a very complementary merger,” said William McMorrow, Kennedy-Wilson’s chairman and CEO.
Kennedy-Wilson is a worldwide real estate marketing and investment services firm, while Heitman Properties is a nationwide commercial real estate management and leasing firm.
The merger brings Kennedy-Wilson’s national portfolio of office, residential and industrial management contracts to 52 million square feet, valued at $6.5 billion. It also allows the new Kennedy-Wilson Properties division to use its property management expertise in Asia, where Kennedy-Wilson already has a major brokerage and investment presence.
“It just takes Kennedy-Wilson to an absolutely stratospheric level compared with before,” said McMorrow, who will continue as CEO. “It will allow us to earn a fee income from property management and leasing and open up the types of deals we can look at.”
Barry Schlesinger, who was CEO of Heitman Properties, will serve as president of Kennedy-Wilson Properties.
Asian apartments
In other Colony Capital and Asia-related news, the company last week announced a joint venture with L.A.-based Oakwood International to manage extended-stay corporate apartments in Asia.
The new joint venture, called Oakwood Asia Pacific, will take over Oakwood’s pre-existing offices, staff and business interests in Asia. The joint venture expects to open its first apartment building in a few months, in Shanghai.
The Asian expansion will accelerate now, with the combination of Colony’s financial strength and Oakwood’s extensive management expertise in the extended-stay and apartment business in the U.S., said Howard Ruby, chairman of Oakwood.
Bullish on Long Beach
Seeing a possible trend of companies migrating to Long Beach from Orange County and elsewhere, Lowe Enterprises has bought a class-A, 12-story office building in downtown Long Beach for $19 million from WLB Partners LLC.
Lowe is putting $2 million of renovations into the 208,820-square-foot building at 180 E. Ocean Ave., including upgrades to the lobbies, restrooms and corridors. The building is 44 percent occupied, with two major tenants United Health Care Services and Dean Witter Reynolds. It has 60,000 square feet of contiguous space available, the largest block in downtown, according to Lowe.
Bob Safai of Madison Partners and Kevin Shannon with the Seeley Co. represented both the buyer and seller.
New York expansion
L.A.-based Unique Hotels & Resorts has taken a bite out of the Big Apple, taking over the management of five New York boutique hotels with a total of 652 rooms.
The management deal follows Gotham Hospitality Group’s recent sale of the hotels to Credit Suisse First Boston.
Unique Hotels plans to preserve the charm of the five properties the Hotel Wales, The Shoreham, The Mansfield, the Roger Williams and The Franklin while making capital improvements and installing a central reservation system.
“We view this as a springboard for future growth,” said Unique’s Managing Director Carlos Lopes.
Unique Hotels, which focuses on upscale hotels of 200 or fewer rooms, plans to acquire management contracts for more hotels and resorts in Southern California, the Southwest, Caribbean, Florida and several major cities across the United States.
Formerly known as International Windsor Group, Unique Hotels upgraded and increased occupancy at the Biltmore Hotel several years ago by going after corporate travelers. Unique Hotels currently manages The Crescent Hotel in Beverly Hills, which will soon undergo a renovation, Lopes said.
Staff reporter Elizabeth Hayes can be reached at (213) 549-5225 ext. 229.
