Deal Gives a New Start to Aging Site of Clock Tower
A landmark clock tower where time has stood still for more than six years is finally on its way to being renovated.
Sagamore Equities LLC last week purchased the Santa Monica “Crocker” Clock Tower office and retail building for $14.6 million in an all-cash deal.
The tower’s four clock faces all stopped at 4:31 a.m. on Jan. 17, 1994, when the Northridge earthquake struck. Sagamore plans to invest about $5 million to completely renovate the building starting with fixing the clocks.
Selling the building was longtime owner Amcal Partners of Los Angeles.
“It’s a location play with irreplaceable real estate. It fits into our investment strategy,” Kevin Green, president of Sagamore Equities.
The property, at 225 Santa Monica Blvd., sits at a prime corner at the mid-way point of the Third Street Promenade. Constructed in 1929, it is the second tallest structure in Santa Monica and has an Art Deco look to it. In the 1960s, however, some of the original architectural charm was covered in travertine.
“If you look at the bones, it’s a beautiful building,” Green said.
The tower is also a rare commodity, because new buildings in the city can only stand at 56 feet tall, or four stories. The clock tower is 192 feet to the top, although the roof line stands at 146 feet. The 360-degree ocean and city views aren’t bad, either.
The property actually consists of two buildings a 12-story, 55,000-square-foot office tower and a 15,000-square-foot, one-story (plus mezzanine) retail space that sits on the promenade. The office tower houses multiple tenants. The retail space houses the Trastevere Italian restaurant.
Sagamore’s renovation will entail removing the exterior travertine, making the entryway more dramatic, bringing the building into compliance with structural codes and with the American with Disabilities Act, redoing the elevators and installing an air conditioning system.
“It’s your basic total rehab, from building and structural systems to cosmetic,” Green said.
The office space is currently “all chopped up” into spaces of only 200 to 300 square feet, Green said. Sagamore plans to gut the floors, which measure 4,000 square feet apiece, and lease them to tenants who will take at least a full floor. Even so, the minimum lease size will still appeal to smaller tenants, who often have to resort to B- or C-class buildings.
“It’s a special building and caters to (a type of tenant that is otherwise) being left out,” Green said. “The game in real estate is assembling large blocks of space. (But) there are plenty of good-quality smaller tenants out there who can afford to pay the rent and are good companies. The market’s somewhat left them in the dust.”
He expects to attract smaller entertainment and production companies and financial firms. Monthly asking rents will run from $3 to $4 per square foot on a modified net basis. Sagamore is working with the city to secure parking.
When the restaurant’s lease expires in two years, Green expects to knock down that portion of the structure and erect a new, multi-level retail space to house a flagship store for a national retailer.
The tower’s refurbishment is expected to take about a year to complete. Green said Sagamore will make every effort to help relocate current tenants during construction.
Sagamore, the equity arm of Sagamore Realty Group LLC, has made $85 million worth of acquisitions in a little more than a year. It has headquarters in Los Angeles, headed by Green, and in San Francisco, headed by founder and CEO Thomas R. Owens. The two came together about a year ago, when George Elkins Property Management Co. (of which Green is president) took half ownership of the company.
In the Los Angeles area, Sagamore also owns Westlake Village I, a 117,000-square-foot office building that is about 60 percent occupied by GTE.
Ryan Smith, Eric Olofson and Michael DeSantis of Cushman Realty Corp. represented both sides in the clock tower deal.
Grocery Shopping
Merona Enterprises has acquired an eight-acre site that formerly housed Fountain Lumber Sales in the Florence area of Los Angeles, said Mark Tarlov, a vice president at Merona.
The site is on Gage Avenue, between Hooper and Compton avenues in an unincorporated area. Buena Park-based Merona plans to build a 100,000-square-foot retail center. Tarlov said negotiations are underway with a supermarket chain to take 50,000 square feet in the center. Tarlov estimated the project’s value at more than $10 million.
It’s a prime example of building in an under-served area, Tarlov said. About 44,000 people live within a mile of the site and there are only a couple of large grocery stores.
Fountain Lumber Sales sold the property and was represented by Mike Smith of Lee & Associates.
Apartment Sales
Fowler, Shore and Flanagan has sold two San Gabriel Valley apartment complexes, one in Covina and one in Monterey Park.
Orange County-based J.H. Properties bought the 250-unit Covina apartments, at 1159 and 1160 N. Conwell Ave., for $19.7 million in an all-cash deal.
The institutional-quality complex, called Hallmark East and West, was built in 1972 by a life insurance company. It sold for the highest cost per unit of any building of its age in that city ever just under $80,000, said Robin Ossenbeck, vice president of investments at Marcus & Millichap, who brokered both deals.
The seller spent close to $2 million to renovate the three-story, garden-style property and the new owner expects to spend at least that much on another renovation.
In Monterey Park, SAF Holdings LLC, which is advised by SSR Realty Advisors, bought the 184-unit Emerald Hills complex at 855 El Repetto for $15.2 million, Ossenbeck said. It is the largest apartment complex in the city that isn’t subsidized under a Department of Housing and Urban Development program.
The three-story hillside complex, built in 1962, is fully occupied. It was renovated by the seller and is in excellent condition, Ossenbeck said. Monthly rents have risen from 75 cents a square foot two years ago to $1.08 today.
“We’re seeing a lot of Northern California buyers here now because prices are so high in Northern California,” Ossenbeck said.
Elizabeth Hayes can be reached at (323) 549-5225, ext. 229, or at [email protected].
