Editor’s Note: This article has been corrected to report that Palisades Capital Partners is based in Beverly Hills.
One of the last large land parcels near downtown Los Angeles, a 5.25-acre plot that was owned by a Korean Presbyterian church, has sold to a Beverly Hills developer.
Palisades Capital Partners shelled out roughly $30 million for the site at 1111 W. Sunset Blvd. in Echo Park, right at the border of downtown.
Palisades will redevelop the site, which includes a sanctuary and other abandoned buildings, into a mixed-use residential project with retail facing Sunset, said Phillip Sample of CBRE Group Inc., who represented both the buyer and seller in the transaction. Official plans have not been submitted.
Palisades could not be reached for comment.
Sources said the firm has already acquired several properties in Los Angeles. In a job listing on the L.A. chapter of the American Institute of Architects’ website, Palisades describes itself as “currently developing high-end residential and mixed-use projects in Santa Monica, Westwood and Beverly Hills.”
The seller, Holy Hill Community Church, was in bankruptcy. Richard J. Laski was appointed by the U.S. Bankruptcy Court to sell the site on behalf of the church as part of a Chapter 11 reorganization. Now that the sale is complete, he will go through the arduous process of addressing the claims filed against the church and paying back its debts.
“This was a dysfunctional church, and so this is a case where bankruptcy proceedings benefited everyone and allowed the church to stop worrying about creditors and start worrying about being a church,” Laski said.
The campus, once the headquarters of the Metropolitan Water District, was acquired by the church in 1994 for $8.1 million. In 2011, the church sold a building on the site to downtown developer Linear City for $6.8 million. Linear converted that property, a 110,200-square-foot office building at 1115 W. Sunset, into the upscale Elysian Apartments. That development was not part of the deal with Palisades.
Mike Shustak and Chris Caras of CBRE also represented the buyer and seller in the transaction.
Torrance, Too
The creative office conversion craze that has swept through Santa Monica, Playa Vista and El Segundo is reaching deeper into the South Bay, if a recent sale in Torrance is any indication.
Century City’s Ruth Group purchased two Class B office buildings totaling 107,000 square feet at 680 and 690 Knox St. for $17.2 million. It paid roughly $160 a square foot to the seller, Toronto investor Brookfield Asset Management Inc., which declined to comment on the sale.
Bob Ruth, president of Ruth Group, said the firm plans to convert the properties into a creative office campus. The plaza between them will be converted into an outdoor workspace with all the hallmarks of tech life these days, including roll-up doors, a dog park and, of course, pingpong tables.
The buildings are 89 percent occupied and the balance will be converted to creative offices with concrete floors and exposed wood-truss ceilings.
Major tenants in the buildings include logistics firm C.H. Robinson and IT firm Allied Digital Services.
Ruth Group chose Torrance to provide a lower-rent alternative to El Segundo, the first of the South Bay cities to receive significant Silicon Beach spillover. In El Segundo, rents at prime creative office properties are roughly $3.50 a square foot a month. Offices in Torrance rent for an average of roughly $2 a square foot a month, according to data from CoStar Group Inc.
The buyer and seller were represented in the transaction by HFF’s Ryan Gallagher, Michael McCann, Derreck Barker and Andrew Harper.
Leasing News
Los Gatos video-streaming giant Netflix has signed a 200,000-square-foot lease, significantly larger than previously reported, at Hudson Pacific Properties’14-story, 323,000-square-foot Icon office tower at Sunset Bronson Studios in Hollywood. Terms of the lease were not disclosed. The tower will be completed late next year. … Nonprofit LA Opera, which stages productions at downtown L.A.’s Dorothy Chandler Pavilion, moved out of a 31,400-square-foot Arts District warehouse at 330 S. Alameda St., which it used for 14 years as a costume shop, because a renewal with Santa Monica landlord ZDI Inc. would have more than doubled its rent, from $1.15 a square foot a month to $2.50. The costume shop moved to a 27,500-square-foot industrial building at 1655 E. 14th St. in downtown’s Central Industrial District, where it pays roughly $1.25 a square foot a month, according to data from CoStar. Its 10-year lease is valued at $4.6 million. Chris Steck, Chris Giordano and John Anthony of Charles Dunn Co. represented the tenant. The landlord was represented by Martin Beck of Major Properties.
Staff reporter Hannah Miet can be reached at [email protected] or (323) 549-5225, ext. 228.
