This Week’s LA Deal Sheet

In a deal that marked the first sale ever for the property, Warner Plaza in Woodland Hills just changed hands in an off-market transaction. We chatted with Savills Studley senior managing director Kyle Miller to get the dish on how the deal came about.

Kyle (with wife Katie and daughter Gianna) tells us he pursued the owner, Plaza International, for nearly two years. The group built Warner Plaza shopping center 41 years ago on land it acquired from Kaiser Aetna in 1972. Kyle says the patriarch of the family-owned company, who's 89, believed it was time to sell because the market has simply played into his hands.

Plaza International also made a decision to only entertain offers from REITs and immediately selected Retail Opportunity Investment Corp. The buyer, ROIC Warner Plaza, an entity of ROIC, paid $76.3M for the property.

As part of the deal, Kyle says, Plaza International’s owner wanted to structure a situation where instead of selling and exchanging into other hard assets, he could structure an UPREIT with one of the publicly traded companies and take shares of their company in lieu of cash. That way he was able to defer capital gains taxes.

Sprouts Farmers Market is the main anchor at the shopping plaza, in addition to Coffee Bean & Tea Leaf, Dickies BBQ and Jerry’s Famous Deli. Mom-and-pop and regional businesses make up the majority of the more than 40 tenants, according to Kyle.

He doesn’t know the exact plans the new owner has in mind for the shopping center, he says, but “I just think that they saw the opportunity to acquire a well-positioned grocery-anchored shopping center in a very dominant trade area within LA County, and there was definitely an opportunity to put some money into the aesthetics and branding of the shopping center in order to enhance the consumer experience.”

Woodland Hills has seen significant growth recently. Kyle also referred to the Warner Center 2035 Specific Plan, under which Warner Center is intended to become a more urban area, like a traditional downtown.

Other recent deals in the area include the TruAmerica Multifamily and Intercontinental Real Estate Corp purchase last month of the Millennium Woodland Hills for $163M. It will rebranded as The Motif. 

SALES

Investment Real Estate Associates sold the 58-unit Adams Street Apartments in Glendale for $21.1M, nearly $2M over the initial asking price. The apartments’ location as well as mix of townhome and loft-style units helped attract buyers, according to the brokers. The new owner is expected to do upgrades and possibly renovate the property. VP David Leibowitz repped both the buyer and seller. EVP Chris Thompson also repped the seller.

IMT Valencia, a 208-unit apartment in Santa Clarita (28100 Smyth Dr) traded to an institutional investor. IMT Valencia (above) was built in 2003 and covers nearly 13 acres and includes a 24-hour fitness center, a TV lounge and billiards area, a children’s play area, and a heated swimming pool and spa. The property consists of 19 buildings totaling 213k SF. Institutional Property Advisors' Greg Harris, Kevin Green and director Joseph Grabiec repped the seller. The terms of the sale were not disclosed.

X Team International’s partner, Strategic Retail Advisors in Newport Beach, negotiated the $8M purchase made by Northgate González Markets at La Habra Towne Centre. The 104k SF property is on about nine acres and is home to CVS, Petco and Jack in the Box. Northgate González Markets plans to renovate the store into a Spanish colonial theme. It's scheduled to open by the end of this year. SRA’s Nelson Wheeler and Blaine Bush repped Northgate González Markets. Jones Lang LaSalle repped the seller.

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Lee & Associates repped the sellers of an industrial facility consisting of two buildings totaling 25,700 SF to MDK International, an online used car store, for $5.6M. The buildings are at 2420, 2422, 2424 and 2426 North Ontario St in Burbank near the Bob Hope Airport. The property sold for $218/SF. Lee & Associates-Irvine VP Jeff Bischofberger and Brett Warner repped the sellers, MHB Investments and Arrow Equities. Coldwell Banker Commercial Advisors broker David Issaians repped the buyer.

LEASES

Grindr has just signed a lease in the Pacific Design Center’s Red Building. The social networking company’s executive offices will take up 18k SF on the building’s 14th floor. It's joining other mostly creative tenants in the building, including Abrams Artists Agency, Viceroy Hotel Group, Whalerock Industries and Clique Media. Cohen Brothers Realty SVP and national director of leasing Marc Horowitz, and the RedBuilding’s Jones Lang LaSalle brokerage team, including managing director Josh Wroble, repped owner Cohen Brothers Realty. Grindr was repped by NKGF’s Ryan Harding.

FINANCING

Sonnenblick-Eichner Co arranged $65.2M in first mortgage financing for the 149-room Hyatt House Seattle/Redmond and the 160-room Hyatt House Seattle/Bellevue, both in Washington. The non-recourse, 10-year fixed rate financing was priced in the low 4% range with interest-only payments for the first five years of the loan. The loans were not cross-collateralized.

The Hazelden Betty Ford Center, the first outpatient adult treatment center outside Rancho Mirage bearing Betty Ford’s name, was recently completed in West LA. HGA Architects designed the project with entryways and access to treatment areas being built to ensure patients have privacy as well as allowing its high-profile patients to have anonymity. The facility has a large group room, a breakout room for staff members as well as their clients, three small rooms for groups, an observation room and eight offices. Alyssa Scholz, director of interior design at HGA, was the project’s lead designer.

EXECUTIVE NEWS

Commercial real estate veteran Joseph Lin (here) has been named the 2016 president and executive chair of the AIR Commercial Real Estate Association headquartered in Glendale. The SVP at Voit Commercial in Ontario plans to use his new position to nurture the next generation of brokers. A native of Taiwan, Joseph previously worked as a petroleum engineer and a geologist.

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Construction industry veteran Jeff Bernards joined Sharpe Interior Systems as EVP. Bernards was previously a general contractor at the family-run firm Bernards. Sharpe Interior Systems also just promoted a few of its own. Fayez Zorob was promoted to VP and will oversee the company’s tenant-improvement portfolio, while Kenney Asmus has been upped to director of operations.

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David Sperling was promoted to director at Institutional Property Advisors. In his role, he focuses on Orange County, San Diego County and the Inland Empire. Sperling was previously associate director. He has worked on the sale, analysis, research and marketing of midsized and larger multifamily communities in Southern California since he joined the firm in 2003.

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Scott Lyle joined Palisades Capital Realty Advisors as principal and COO, focused on oversight for the company’s property management, asset management and leasing and sustainability practices for its portfolio. Palisades is also expected to close this month on its $150-million Palisades Income and Growth Fund II. Lyle was previously COO at Arden Realty/GE Capital.

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CBRE Group SVP Brett Hartzell has joined the company’s West Coast National Partners team, which also includes Darla Longo, Barbara Emmons, Rebecca Perlmutter, Michael Kendall and Andrew Briner. The group sold $2.5B of investment real estate last year, totaling more than 23 million SF. Hartzell has more than 30 years of experience doing real estate in Washington and Oregon. Taylor Odegard, a member of Brett’s team, also joined the group.