A Spanish revival-style apartment complex in Brentwood traded hands last week for more than $1 million a unit, the highest price per unit ever paid for an L.A. multifamily building not near a beach.
Beverly Hills investor Darius Meraj purchased the 20-unit building at 11609-11 Montana Ave., dubbed Villa Montana, for $20.5 million from Ken Kahan of West L.A. firm California Landmark, which developed the 45,000-square-foot property in 2005. The price more than doubled the average Brentwood sale price of $425,125 a unit, according to data from CoStar Group Inc.
Meraj plans to hold on to the building, which is 95 percent occupied. The units are 2,052 square feet on average and rent for an average of $4,730 a month. The fact that the units were developed to meet condominium specifications and could be sold individually was attractive to Meraj, even though he doesn’t plan on selling them anytime soon, said Marcus & Millichap’s Paul Darrow, who represented both the buyer and the seller along with Ron Harris, Greg Harris, Joseph Grabiec and Michael DiSimone.
Meraj, who purchased the building after selling a property in New York and using a 1031 exchange to reinvest the funds, justified paying top dollar because the property commands high rents, Darrow said. Then there’s the fact that New York investors often have a different sense of what “top dollar” means.
“Moving the money from New York, the perception of value is different,” Darrow said. “It’s all relative.”
The chance to buy a 10-year-old midsize property in Brentwood is rare, Ron Harris said. “It speaks to a powerful Westside market.”
Kahan said the timing was right to sell the property because, at 10 years old, the development was mature and he was offered a premium price.
In 2002, he acquired the site, which was home to an older 22-unit building, for only $3 million, or $136,364 a unit. He demolished that complex to make way for Villa Montana.
Parking Lot Proposals
A parking lot in downtown L.A.’s Historic Core might soon become a super-skinny 28-story hotel.
Dubbed “Lizard in Los Angeles,” the development proposed by New York and Beijing-based firm Lizard Capital for 633 S. Spring St. includes 176 rooms, 1,600 square feet of ground-floor retail and restaurants on three floors. The developer’s filings with the Department of City Planning add zero parking to the structure – unless you count 18 spaces for bikes. Offsite lots and structures would be used instead, according to the paperwork.
Lizard Capital, which acquired the lot for $4.3 million in 2013, did not respond to requests for comment, but its website says the development is “expected to open in 2017” and will feature “the highest roof bar in Los Angeles.”
Another parking lot, this one in Venice, is the site of a proposed 29,000-square-foot creative office building. A limited liability entity operating as Boardwalk Sunset owns the property and has hired Venice architect Glen Irani to design a three-story mixed-use development with ground-floor retail and three levels of underground parking at 601 Ocean Front Walk. Real estate sources said there are rumors the site is being developed specifically as a headquarters for real estate-hungry Venice startup Snapchat. However, Irani said the owner of the lot does not have an anchor tenant and wants to get through the coastal development permitting process before leasing.
The property will be leased in-house without a broker.
“Given the demand for space, I don’t know if there is any reason why an agent would be required,” he said.
Snapchat representatives did not respond to requests for comment. Sources said the company recently leased space in Gingerbread Court at 517 Ocean Front Walk, which they said is owned by the same people as the parking lot.
The Venice rumor mill is also high on the possibility that the startup took over what used to be sports bar Nikki’s at 72 Market St. for a community space or employee cafeteria.
Hollywood Exchange
A four-story, 75-unit multifamily building in West Hollywood traded hands last month for roughly $22 million, or $293,000 a unit.
Alan Nissel of Miracle Mile real estate investment, development and management firm Wilshire Skyline Inc. bought the 68,000-square-foot building at 7513 Fountain Ave. from Santa Monica multifamily investor Jeffrey Nemoy. Nissel purchased the rent-controlled property after selling properties at 444-46 N. Oakhurst Drive in Beverly Hills and 2025 Argyle Ave. in Hollywood and using a 1031 exchange to reinvest the capital earned from the two sales. The Oakhurst multifamily buildings sold for $10.1 million; the Argyle building for $6.8 million.
Nemoy was not actively marketing the fully occupied property at the time that he was approached about the sale, said Azzi Advisors’ Tony Azzi, who represented Nissel in the transaction along with his associate Rabbie Banafsheha.
“We had a client with an exchange who only buys in good locations, so we came to him even though it wasn’t listed,” Azzi said.
The sale price was slightly higher than the $262,000-a-unit average for the area, according to CoStar.
Nissel plans to hold on to the building, Azzi said.
“Obviously they are going to fix the units as they become vacant and make them super nice,” he said. “That’s all you can do when it’s rent controlled.”
The building consists of 600-square-foot studio apartments, which rent for roughly $1,200 a month; 750-square-foot one-bedroom apartments, which rent for roughly $1,500; and 1,000-square-foot two-bedroom apartments, which rent for roughly $2,000.
“We’re in a market that’s very heated with very little inventory to buy and some sellers are taking advantage of that by selling in exchanges to upgrade to bigger buildings,” Azzi said.
Stephen Saltzman of Keller Williams Commercial in Santa Monica represented the seller.
Staff reporter Hannah Miet can be reached at [email protected] or at (323) 549-5225, ext. 228.
