January 13, 2015

Small Tenants Have Big Impact

As intrepid fans of the commercial real estate community, we've got more on our minds than just whether LA will finally see the return of NFL football. That's why we're excited to host Bisnow's 5th Annual LA State of the Market, Wednesday, Jan. 14, at the JW Marriott at LA Live, starting at 8am. (Sign up here.)

Among our speakers will be Rising Realty president Chris Rising, who's looking forward to the opening of the Cross Campus co-working facility at his property in Pasadena (87 N Raymond). The collaborative, on-demand work space and business event venue will occupy close to 20k SF on four floors for its second SoCal location. RRP's office complex, located across from the train station in the heart of Old Pasadena, is fully leased. Chris also reports the firm's PacMutual campus in DTLA had an extremely strong 2014 in terms of tenant interest and deals. It was a year that showed you can have a lot of activity and absorption with small tenants, attracted by Downtown's density, transportation network and vibe, Chris adds. The firm, founded by Chris and father Nelson Rising, is continuing a legacy of nurturing young stars. We had a great sit-down with Chris this month.

CohnReznick (Field) MLA

Another top speaker: Liberty SBF managing director Alex Prombaum (snapped with Golden State Warriors star Stephen Curry) tells us his company is making a push to be one of the biggest hotel lenders in the country. The firm just closed a sizable line of credit with Capital One to make SBA 504 loans--one of the most popular programs by which hotel owners finance their properties--on a nationwide basis, with incentives to referral sources. Last year, the firm did about $100M in direct financing--up 50% from the previous year--tripled its staff and opened several new production offices across the country. Liberty, which now has four products, has a target to do $400M in financing deals this year. When he's not thinking about loans, Alex sometimes moonlights as a singer in a cover band.

Allen Matkins partner Tony Natsis (with wife Demetra, son Niko and Niko's fiancée Nicola Kronstadt) says 2015 should be another busy year. He'll interview Kilroy Realty CEO John Kilroy at the event. Tony says the more robust players on the West Coast--Kilroy obviously being one--are following their game plans and not slowing down. That said, their playbooks have evolved over the past several years. Clients now are more focused on value-add and development opportunities, as opposed to buying existing, well-leased product, and everybody is trying to expand to the additional hot markets. If you were killing it in S.F., Tony says, you're expanding your geography to Seattle/Bellevue. (In the middle of the last decade, folks debated even going to Seattle, a market that's now time-tested.)

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Paradiso Crossfit (FreeClass) LA
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Top stories on Bisnow.com

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Izek Shomof Plans Another Historic Revival

Izek Shomof, known for his planned redevelopment of the Sears Tower (one of LA's Five Biggest Multifamily Developments) has taken on his next project: The nearly 90-year-old Rialto Theatre in South Pasadena, the LA Times reports. The 1,200-seat, single-screen theater is listed on the National Register of Historic Places, but closed in 2010. The Times says Izek plans to renovate and convert it into an entertainment venue.

Izek's highest-profile project is the 90-year-old Sears Tower. He plans to keep the historic building, but add 1,000 units. Izek and co-owner Leo Pustilnikov also plan to incorporate some creative office on the lower levels. The 23-acre site is expected to break ground this year.

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Massive Burbank Airport Hotel Trades for $100M

A JV of AWH Partners and Starr Cos has purchased the 488-key hotel, which is the second largest in the Valley, from Westbrook Partners. No financial details were disclosed, but Bisnow's market sources say the deal got done at about $100M. HFF managing director Scott Hall, who repped Westbrook, says $10M in recent renovations have increased the hotel's status in the market. The hotel traded in 2006 for $125M, but Westbrook picked it up in late 2012 out of foreclosure at a steep discount. The hotel at 2500 North Hollywood Way is adjacent to the Bob Hope Airport, and is composed of a nine-story West Tower and eight-story East Tower with a conference center of nearly 46k SF.

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Undeterred, New Geoff Palmer Project Underway

It seems as though a massive fire destroying a 1.3M SF development isn't slowing Geoff Palmer down. This month, the developer received permits for the second part of Broadway Palace, Building LA reports. The 439-unit mixed-use project on Broadway calls for a mix of studio, one- and two-bedroom units, spread between two separate building. One would include about 35k SF of ground-floor retail and the other would offer some live/work units.

The investigation into the arson that brought down the Da Vinci project is still underway. But in the meantime, the city is interested in picking up the property LA councilman Tom LaBonge thinks is too close to the freeway, and would better serve the city as a parking spot.

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Foundations for Success in Commercial Real Estate, Jan. 15-16

Don't just learn how the real estate business works--learn how to work the business. CCIM Institute offers the new Foundations for Success in Commercial Real Estate course in Santa Ana on Jan. 15-16. This two-day program provides agents, brokers and students with the tools to differentiate between the needs of owners and tenants, develop a personal marketing plan, utilize basic financial analysis, solve investment problems using a financial calculator, and connect with future commercial real estate leaders in person. To find out more about our sponsor's course and to register, click here or call (800) 621-7027.

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Tell Us

Any new and exciting deals to start the new year? Julie@bisnow.com