Mid-Wilshire developer CIM Group appears to be reviving development plans at the long-deserted Sears Hollywood site.
Sources said the firm paid $43.5 million, or $8.2 million an acre, earlier this month to acquire the 5.3 acres at 5601-5667 Santa Monica Blvd. between North Wilton Place and North Saint Andrews Place. It plans to build a mixed-use complex with as many as 700 apartments and more than 300,000 square feet of retail.
The seller, Culver City developer Continental Development Group, originally planned to break ground in 2009 on a $275 million development, dubbed Paseo Plaza, with 475 residential units and 380,000 square feet of retail. But things didn’t go so smoothly.
First, it faced community opposition in the form of a lawsuit brought on behalf of the La Mirada Neighborhood Association. The project was ultimately approved by the city of Los Angeles in 2007, but funding dried up once the recession hit and Continental never resumed its plans when the economy began to recover.
Continental Chief Executive Juri Ripinsky and a spokeswoman for CIM declined to comment.
The property includes the roughly 100,000-square-foot Sears building, which has been vacant since the department store left in 2008. That building will be kept on the site and renovated by CIM, sources said. The property also includes an empty lot and several boarded-up retail properties, which will likely be razed.
Sources said groundbreaking is expected next year.
If the redevelopment proceeds as reported, it will be a major change for the currently derelict stretch of Santa Monica, just a few miles east of the bustling developments on the same street in West Hollywood.
College Try
Santa Monica’s Watt Cos. snatched up a West L.A. office building last week at a deep discount.
It paid $27 million, or $250 a square foot, for the 106,400-square-foot Class B office building at 3000 S. Robertson Blvd., just off the 10 freeway. The price was well below the $450-a-square-foot rates seen in adjacent Culver City, said Scott Schumacher of CBRE Group Inc., who represented the seller, Brown Family Trust, along with Kevin Shannon, Deron White and Kurt Davis.
It was also less than the $29.8 million the trust paid to acquire the property in 2006, when it was 95 percent leased. The property has struggled since for-profit Corinthian Colleges Inc. filed for bankruptcy in May, subsequently vacating one-fourth of the building. Today, it is only 42 percent leased.
The trust sold because it would take a lot of money to lease up the vacated space, Schumacher said.
On the flip side, Watt saw the buy as an opportunity to remodel and reposition the building.
Shannon said investors are increasingly interested in repositioning older offices, seeking rents that are often 30 percent higher once buildings are upgraded. He added that investors also have an option to sell the property – usually at a significantly higher price – after making improvements.
Of Note
Father-son duo Robert and Parker Champion of West L.A.’s Champion Real Estate Co. shelled out $13.4 million to fellow father-son-duo Phillip and Jeremy Miller earlier this month for an 87-unit Koreatown apartment building at 701 S. Gramercy Drive. Andrew Levant of Kennedy Wilson’s Beverly Hills office represented the buyer and the seller in the off-market sale and arranged $10 million in debt financing on behalf of the buyer. Levant also brokered the $1.1 million sale of a home on the lot next door, which will be scraped, paved and converted to parking. He said the family nature of the negotiations helped the transaction along. … CBRE has acquired Chicago’s Forum Analytics for an undisclosed sum. Forum provides data science about consumer behavior to retailers and other clients that include Ace Hardware, Sephora and Verizon Communications. It will also work with CBRE’s retail tenants, providing them with data on consumer behavior at specific locations. The deal follows CBRE’s acquisition of Indianapolis’ Sitehawk Retail Real Estate in November and Dallas’ United Commercial Realty in January.
Staff reporter Hannah Miet can be reached at [email protected] or (323) 549-5225, ext. 228.
