A 13,000-square-foot double-lot property, located on a corner lot at Hamel and 3rd in Beverly Grove, recently sold for approximately $12 million after a high-stakes bidding war that went $50,000 over the asking price. It set a price-per-square-foot record in the area.
The deal is being referred to as a covered land play, which essentially means the land is eligible for mixed-used development. In this case, the site has the possibility of becoming a 50-unit multifamily and retail mega-plex, with 11% of units needing to be affordable.
The sale includes 8706 W. 3rd St., which currently houses tenant AOC Wine Bar West Hollywood, and 309 S. Hamel Rd., an eight-unit apartment building.
The sale marks a record high this year in terms of price per square foot in the sought-after 90048 ZIP code, coming in at $1,165 per square foot.
“This was a very interesting situation, a bidding war between two natural buyers – the tenant AOC and the next-door owner,” said Michael Monempour, a vice president at El Segundo-based commercial real estate brokerage firm Lyon Stahl Investment Real Estate, who represented the seller in the transaction.
Ultimately, the next-door neighbor went above and beyond to acquire the double lot – which resulted in them paying $50,000 over the listing price to seal the deal.
“The price was outrageous, it’s not indicative of the market. But with two motivated buyers, this was a once in a lifetime opportunity that resulted in the seller cashing out big,” Monempour said.
The seller, Sean Macpherson, is a high-profile real estate investor who owns several hotels and restaurants in Los Angeles and New York. The name of the buyer was not disclosed.
“The difference maker was the eight-unit apartment building,” Monempour said.
The land is eligible for the city’s TOC program, which stands for transit-oriented communities, an incentive program to encourage the construction of affordable housing near bus and train stations.
Each lot in a TOC affordable housing incentive area is determined to be in a specific tier – one through four – based on the shortest distance between any point on the lot and a qualified major transit stop.
The Hamel and 3rd Street lot is applicable for TOC tier two, a medium-level incentive area tier. If the buyer chooses to redevelop the land, the subject properties will likely be demolished.
There are currently four years left on AOC’s lease term with one five-year option renewal. All tenants in the apartment building are paying month-to-month rent under the city’s rent-stabilization ordinance. Seven of the eight units were occupied at the time of the sale.