A 74-unit loft apartment building across from Pershing Square in downtown Los Angeles has been sold for an estimated $30 million, one of the market’s highest prices in a year.
A South Korean investor group operating as Admire Hill LP bought the Title Guarantee Building at 411 W. Fifth St. from Bank of America Corp., which acquired it in 2011 after foreclosing on the previous owner.
Financial terms were not disclosed, but based on industry estimates, the sale price of $405,000 a unit would be the highest in downtown on a unit basis since the Brockman Lofts property on West Seventh Street was sold for about $484,000 in March, according to CoStar Group Inc.
Adam Tischer, a vice president in the downtown office of Colliers International who with Mark Tarczynski brokered the deal for the seller, confirmed the transaction. The property, he said, was a high-quality building that received several offers since he began marketing it in June.
“The building’s construction and design are unique and virtually irreplaceable,” he said. “It’s in a wonderful, emerging location that’s constantly getting better.”
Admire Hill plans to operate the fully leased 119,000-square-foot building, built in 1931, as is.
While the residential market downtown has taken off, few properties have gone on the market. Only nine multifamily buildings in a market of 151 traded hands in the last year, according to CoStar.
The most valuable of those deals was Simpson Housing LLP’s purchase of the 80-unit Brockman Lofts for $38.8 million. Equity Residential purchased the Milano Lofts for $35.5 million, or $358,600 a unit, and Capital Foresight purchased the 132-unit Santa Fe Lofts at 121 E. Sixth St. for $35 million, or $265,000 a unit.
Arty Maharajh, vice president of research in the downtown office of brokerage firm Cassidy Turley Inc., said he was not surprised to see the Title Guarantee Building sell for such a strong price.
“Apartment sales in downtown and across the country are on fire and have been in demand since the recovery,” he said. “The Title building has a perfect central location with proximity to the highly desired Financial District due to Metro access, and because of the myriad of restaurants and amenities popping up downtown again. This is a great corner and spot of downtown to own.”
The 14-story building, at Fifth and South Hill streets, was built in 1931 for Title Guarantee and Trust Co. at a cost of $800,000. It was designed by renowned architects Parkinson & Parkinson, which also designed Los Angeles City Hall, in Gothic and zig zag moderne style with art deco detailing. Those design elements landed it a spot on the National Register of Historic Places in 1984 for its significance as an example of art deco style among L.A.’s commercial buildings.
It was operated as offices for various firms until developer Daniel Schwartz purchased the building for $10 million in 2004. He completed a $38 million conversion into 74 high-end condos in 2007.
The project came to market as the economy was beginning to tank, however, and sales of the condos stalled. Schwartz began marketing the units as apartments and eventually leased the whole building, but rental income was not enough to service the debt and he was forced to file Chapter 11 bankruptcy protection in 2009. Bank of America eventually took the building back through foreclosure.
The bank embarked on a series of improvements to common areas and added a gym to the property before marketing it for sale in June.
Today, monthly rents for the one- to three-bedroom units, which average about 1,100 square feet, begin around $2,000 and run to more than $10,000.
The underground parking lot has 98 spaces and a 24-hour valet.
The building includes a penthouse with an exclusive rooftop infinity pool and views of the downtown skyline.
These amenities had several companies interested in the property, but the Korean investors won out with the highest bid and the ability to close within 60 days, Tischer noted.
“In the end, we were able to introduce a new foreign buyer into the downtown market,” he said.