The first Los Angeles County project for Atlanta-based developer Wood Partners LLC has been out of the ordinary.
The final 81-unit building of Alta Hollywood, an apartment complex one block east of the Hollywood & Highland Center, is hitting the market this month. The first two buildings totaling 137 units opened in October.
Wood Partners has developed thousands of residences since it was founded in 1998 and has apartment complexes in Houston; Washington, D.C.; and other cities. However, breaking into the L.A. market with the right product wasn’t easy.
“It’s in a high-profile, very high-demand, very attractive area of L.A.,” said Brian Hansen, the development partner for Southern California. “We definitely focused more on design and amenities and making sure we deliver a product that a sophisticated renter demographic would really appreciate.”
Wood Partners hired Orlando, Fla.-based Catalina Design Group to create what it terms a “lifescape” orientation to the complex.
The upscale apartments at 1714 N. McCadden Place feature stone counter tops and lots of stainless steel, but the developer went a step further. Hansen described the courtyard as “pet friendly” and noted the complex has a game lounge so residents can play Wii and other games. There also is a club with a bar for resident events, and the pool features cabanas.
Hansen said the building has been scouted as a potential location for Oscar parties and other entertainment industry events. Residents would be among the list-only guests.
Those condo-level amenities don’t come cheap. One-bedroom units start at $2,059 per month, while two-bedroom units are going for $2,990 – well above the market average.
The first two building are 20 percent occupied and Hansen said he projects them to be fully rented by the middle of next year. The company also owns a 30,000-square- foot South Park site entitled for a 290-unit, 26-story apartment building.
“We like the long-term L.A. economy. We like the population and we want to do as many deals as possible,” Hansen said. “The pure size of L.A. County is very attractive.”
Development Sale
A 150,000-square-foot development site in Valley Village changed hands for $15 million last month in another sign of the apartment market’s strength.
The site, at 12629-12729 Riverside Drive, is the location of a former Tenet Health Systems hospital that was closed after being damaged by the Northridge Earthquake. It has since served as a set for “Scrubs” and other medical-themed television shows in recent years, said Greg Harris, an executive vice president at Marcus & Millichap who represented both buyer and seller.
The buyer, IMT Capital, an L.A. private real estate investment firm, plans to tear down the structure and build market-rate apartments. The site is already fully entitled for multifamily construction, Harris said.
“When institutional equity returns to the market, (buyers) want shovel-ready projects and this is one of the few out there,” he added.
The seller, PCS Development of Los Angeles, informally considered offers earlier this year. Initial prospective buyers were hesitant to go above $10 million, Harris said.
“Literally, in the last 90 days, the interest became very aggressive and we ended up entertaining four local and regional development groups who came to the table,” he said.
PCS had plans to sell the property to another developer for the construction of a senior living community, he said, but financing fell through during the credit crisis.
“The market came back pretty drastically for developable, entitled land, and our clients saw an opportunity to sell at a good price,” Harris said.
PCS and IMT could not be reached for comment.
Ocean Views
Gilchrist & Rutter, a Santa Monica real estate law firm, has renewed the lease on its ocean-view headquarters in a deal valued at $8.9 million.
The 10-year lease for 16,101 square feet at 1299 Ocean Ave. with landlord Equity Office isn’t cheap. The starting per-square-foot rent is around $4.50, but the ninth-floor offices have unobstructed ocean views and are within walking distance of shops and restaurants, said tenant representative Gary Weiss, a principal at LA Realty Partners.
“When you’re negotiating in trophy buildings, there’s a reason why you’re there and you expect to pay a little bit more,” he said. “You can use other high-profile buildings as leverage, but you’re still going to end up paying more rent than you would in a typically lower-class building.”
The negotiation also was drawn out, lasting 12 months, Weiss said.
Chicago-based Equity Office agreed to a tenant improvement fund, which Weiss said the law firm plans to use on technology, paint and carpeting, as well as other cosmetic improvements.
The landlord was represented in-house by Gail Goldstein, who did not return requests for comment.
Gilchrist & Rutter were also represented by brothers Mike and John McRoskey, managing directors at Jones Lang LaSalle.
A representative of the law firm declined comment pending the deal’s finalization.
Staff reporter Max Zimbert can be reached at [email protected] or at (323) 549-5225, ext. 263.
