Another week, another Westside office building sells for more than $200 a foot.
The latest to join the growing list of office buildings commanding top prices is the so-called California Federal Bank building at 12001 San Vicente Blvd., near the corner of Saltair Avenue in Brentwood.
The Beverly Hills-based Allen Kohl Trust has sold the 55,000-square-foot building for $12 million to Douglas Emmett Realty Advisors, a West Los Angeles-based firm that already owns a number of buildings in the neighborhood, according to John Bertram, a principal at Westmac Commercial Brokerage Co. who represented both the buyer and seller in the deal.
The sales price translates to $218 per square foot, a level that has become commonplace as Westside office values have climbed steadily over the past two years, said Bertram. A building at 11726 San Vicente, comparable in size to the CalFed building, sold for about $150 a foot about two years ago, he said.
The prices for most buildings remain far below those paid for the most prestigious buildings such as the $400 a foot Marvin Davis is said to have paid recently for Fox Plaza in Century City or the $328 a foot paid for the Sony Music campus in Santa Monica. But the prices being paid for less-stellar Westside buidings are nonetheless heady.
“It’s getting so that you can count on just about any well-leased, Class A office building out here (in prestigious Westside neighborhoods) to sell for over $200 a square foot,” Bertram said.
Farther east, in the Miracle Mile District, the prices have been more subdued. For example, the six-story, 95,000-square-foot office building at 6330 San Vicente Blvd., just south of Wilshire Boulevard, was recently bought by Kearney Street Real Estate Co., an affiliate of the Morgan Stanley Real Estate Fund, for $6 million, or just over $63 a square foot, said Jim Brooks, a Kearney vice president.
Brooks attributed the low price to the building having only one tenant and needing $2.5 million in improvements.
Brooks said Kearney plans to rehabilitate the building, market it as “Beverly Hills adjacent,” and sell it at a profit after getting it more fully leased.
Other well-maintained buildings in the neighborhood have occupancy rates of 80 percent or more, Brooks said, so Kearney is confident it can attract tenants by sprucing up its new acquisition.
“Even if we spend the full $2.5 million to renovate it, we’ve still bought the property at a pretty good discount compared with replacement costs,” Brooks said. “It was what we consider one of the last remaining value-added opportunities in the immediate area.”
Industrial action
One of the other sectors really popping in L.A.-area real estate, as noted here recently, is industrial space in outlying areas.
Catellus Development Corp., currently one of the most active developers of build-to-suit projects, said it has signed three recent build-to-suit deals totalling 395,000 square feet of new space.
The deals involve $18 million in new construction, said Tony Manos, a Catellus vice president. He said the company currently has 515,000 square feet of space either planned or under construction.
Manos said the three most recent deals involved Champion/Nationwide Papers, Playbut Inc. and Formosa Textiles.
Champion/Nationwide, a maker of paper products, signed an agreement to buy a 239,000-square-foot manufacturing and distribution center at Catellus’ Desman Road Partners Industrial Park, an 81-acre development on Desman Road at Alondra Boulevard in La Mirada. Construction is slated to be finished in November on the project, which Catellus is building in partnership with Ford Motor Land Development Corp.
Playbut has signed a six-year lease on a 109,450-square-foot building to be built at Catellus Commerce Center on Cheryl Lane at Bear Canyon Road in the City of Industry. It will serve as the new corporate headquarters of the toy manufacturer and distributor. Construction is expected to begin in the third quarter and be finished in March 1998.
Also at the City of Industry site and slated for the same construction schedule is the Formosa Textiles build-to-suit a 46,630-square-foot building that Formosa will buy and use as its new headquarters.
The Champion/Nationwide project is in an L.A. submarket known as the Mid-Cities, while the City of Industry projects are in the San Gabriel Valley submarket two of the most popular submarkets for companies looking for industrial space, Manos noted.
Short items
Cushman & Wakefield will add about 2.23 million square feet of space in Southern California to its asset management portfolio as a result of the company’s purchase last week of Premisys Real Estate Services Inc., the property management arm of Prudential Insurance Co. The new space will push Cushman’s Southern California portfolio to 21.23 million square feet under management
Silagi Development Co. of Thousand Oaks said it broke ground on a $10 million, 95,000-square-foot office development called Westlake Gardens on Townsgate Road just south of the Ventura (101) Freeway in Westlake Village. Moshe Silagi, a principal of the development company, said in an announcement that the 50,000-square-foot first phase of the multi-phase project is 40 percent preleased and is due to be occupied by the end of the year.
Bob Howard is a contributing reporter who writes on real estate for the Los Angeles Business Journal.
