Three Westside office buildings sold to a single buyer this month, at prices far higher than their trades just a few years ago. The transaction was further evidence of ongoing demand for renovated office space in L.A.’s seaside submarkets.
The buyer, Chicago-based LaSalle Investment Management, purchased the properties for $168 million, according to public records, picking up more than 205,000 square feet in Playa Vista and Malibu.
The sellers were Canyon Catalyst Fund in Century City and Pacshore Partners in West Los Angeles, according to a press release from CBRE. They were represented by Sean Sullivan, Todd Tydlaska, and Michael Longo from the brokerage’s capital markets team. The sellers had purchased the properties between 2013 and 2015 for a total of $72.1 million through a joint venture.
The Playa Vista properties are two office buildings that recently underwent heavy makeovers.
One, a 39,600-square-foot building at 12901 W. Jefferson Blvd. that was once a Class B industrial building, sold for $45 million, vaulting over its $15.9 million price from 2015. Ad agency Deutsch Inc. signed a decadelong lease that year to take the full space, but has yet to move in while final upgrades are underway.
LaSalle purchased the second Playa Vista building, a 118,330-square-foot property at 5340 Alla Road, for $95 million – far above the $36.2 million price tag from 2013. At that time, the property was only 60 percent leased. By late 2015, it had come close to full occupancy, largely drawing from the ad industry.
The price hike of the Malibu property was also notable, although not as drastic. The 36,500-square-foot complex at 22619 Pacific Coast Highway fetched $28 million in the sale to LaSalle. It last sold for $20 million in 2015, just as its sole occupant, Jakks Pacific Inc., announced plans to relocate to Santa Monica. The toymaker had been a tenant since its founding in 1995.
Canyon Catalyst is a joint venture between the California Public Employees’ Retirement System and Canyon Partners Real Estate. LaSalle made its purchase on behalf of a pension fund.
“There is an abundance of capital from investors eager to invest in West L.A.,” Sullivan, an executive vice president at CBRE, said in a statement.
LaSalle said in a separate statement that it was attracted to Playa Vista as a long-term growth opportunity and Malibu for the ability to bring in new tenants.
Silver Lake Lining
A prime dining corner of Silver Lake has sold for $13.3 million, putting its value at a solid $1,267 a square foot.
Philip Voorhees, an executive vice president at CBRE who represented both buyer and seller, said the price for the three restaurant spaces on Sunset Boulevard is likely a high mark for the neighborhood.
“It’s a product of the rents the tenants are paying and the lower capitalization rate,” Voorhees said. “Kettle Black, Sawyer, and El Condor, they’re all thriving at the property.”
He declined to provide lease terms, but said monthly rents in the area range from $4 to $7 a square foot.
Seller 9 Mile Investments of Pacific Palisades purchased the sites in 2012 and spent more than $2.3 million on renovations, which were completed last year. El Condor replaced longtime tenant El Conquistador in 2014, while Sawyer opened next door in May 2016. Kettle Black followed in August. They comprise 10,497 square feet.
The buyer, a subsidiary of Strategic Realty Trust Inc. of San Mateo, was drawn to the area’s population density and youthful demographic, according to Voorhees.
Seeing Red
The iconic Red Building at West Hollywood’s Pacific Design Center is making space for Criteria Corp. The company, which provides employment testing software, leased 8,000 square feet last year and is doubling that amount.
The 400,000-square-foot Red Building, designed by Cesar Pelli, was completed in 2013 as a complement to Pelli’s Green and Blue buildings, but has yet to reach full occupancy. According to CoStar, the building’s east side is just over 16 percent leased, while the west side is 88 percent leased.
Michael Shuken of Savills Studley represented Criteria while Marc Horowitz of represented Cohen Brothers Realty Corp., the building’s owner, internally.
Hawaii-Bound
CBRE veteran Lew Horne is taking on new duties. The brokerage’s president for Los Angeles and Orange county services will also oversee a new division spanning San Diego and Hawaii. That will give Horne, who has been with CBRE since 1984, an eye over 16 markets ranging from Honolulu to downtown Los Angeles.
Staff reporter Daina Beth Solomon can be reached at [email protected] or (323) 556-8337.
