Hollywood Holdings has purchased the 42,916-square-foot Gershwin Lofts Retail @ Hollywood for $30.4 million.
The two-building property is fully occupied by Marshalls, Petco and Farmer Boys. It’s located at 5501-5521 Hollywood Blvd. and 1719-1723 N. Western Ave.
CBRE Group Inc.’s Patrick Wade and Alex Kozakov represented the seller in the transaction.
“The Gershwin Lofts Retail is a generational corner piece of real estate in East Hollywood,” Wade said in a statement. “It is rare to acquire a stabilized, urban center that offers strong in-place cash flow with long-term redevelopment potential.”
In the fourth quarter, the Hollywood/Silver Lake submarket had a vacancy rate of a mere 3.2% with an average asking lease rate of $3.34 a square foot, according to CBRE data. The area saw no net absorption.
The market reported stronger numbers than the Greater L.A. area as a whole, which saw an average asking lease rate of $2.75 a square foot and an overall vacancy rate of 6%.
The Greater L.A. market saw nearly 197,000 square feet of positive net absorption during the fourth quarter.
Retail real estate sales in L.A. were strong in 2021. Last year saw $6.3 billion of retail real estate trade hands, up from $4 billion the previous year, according to CBRE data. Transaction volume was also up from the $5.7 billion seen in 2019 before Covid-related lockdowns began.
Experts agree that good retail locations are in high demand.
“We received more than a dozen qualified offers for this deal,” Kozakov said in a statement. “Retail properties that are located within growing residential and mixed-use neighborhoods, such as this one, continue to be very sought after by many different investors, including developers, private family offices and 1031 (exchange) buyers.”