This Week's LA Deal Sheet
Lion Real Estate Group LLC bought Park Sienna I, a 100-unit apartment complex in Reseda (6425 Reseda Blvd), from a private seller for $17.5M or $175k/unit. The purchase included a $10M loan assumption provided by Fannie Mae and arranged by Berkeley Point.
Re/Max Commercial broker Michael Koshet (above, with daughter Milan visiting daddy at work—Partners Trust Commercial HQ in Beverly Hills) repped both the buyer and seller. If there's one word that sums up this deal, he tells us, it would be persistence. Multiple buyers went under contract and then backed out, citing deferred maintenance although the deal was a value-add play. With his patience worn thin, the seller decided to take a break and hold onto the property. Michael, having invested a lot of time in the deal, gave it one last go and brought in Lion owners Mory Barak and Jeff Weller.
Park Sienna was built in 1969 and was 98% occupied at time of sale. For six months, Michael says, Mory and Jeff pursued the seller through phone calls and emails. "They didn't take their foot off the gas pedal for one minute." Finally, the seller was ready to do the deal. The buyer went in practically non-contingent to assure the seller that they would go forward. They plan on continuing the value-add rehab that the seller had begun. He notes Victory Boulevard is as much of an SF Valley main street as highly vaulted Ventura; a number of mixed-use developments are planned for the area (including the ground-up redevelopment of a Dodge dealership). According to Michael, these projects will provide an option for renters who are priced out of Warner Center.
Stock Building Supply Holdings, a distributor of lumber and building materials, sold its West Coast flagship location in LA (3860 Grand View Blvd) to a private investor for $15.7M. Sands Investment Group's Chris Sands repped the seller. Stock was a brief owner—it occupied the building as a tenant for more than 20 years when the property's then-owner decided to sell in late 2014. SIG conducted a six-month review that determined the best course was for Stock, which had a first right of refusal, to purchase the building and restructure the lease into a 15-year term. SIG then put the property back on the market, generating 11 offers in the first week.
Rudolph Foods Co, a major snack supplier that is the world's largest manufacturer of pork rinds, bought a 127k SF industrial building in the Beaumont Logistics Center from CT Realty for $6.3M. The Lima, OH-based company plans to move from San Bernardino in November. The property (920 Fourth St in Beaumont) is part of a 572k SF logistics center consisting of two LEED Gold industrial warehouse buildings. Cushman & Wakefield’s Milo Lipson, Kyle Kehner, Ryan Velasquez and Tim Pimentel repped CT. CBRE's David Consani repped Rudolph.
American Realty Advisors sold an office building and data center containing more than 513k SF in Phoenix on behalf of one of its clients for $91.5M. The property is fully occupied by American Express Travel Related Services Co. CBRE's Jim Fijan and Chad Freese repped the seller. The buyer was Griffin Capital Corp, a publicly registered non-traded REIT.
J&B Asset Management bought Rockwood at the Cascades, a 223-unit apartment community in Sylmar (16601 Foothill Blvd) from Fairfield Sylmar LP for $45.8M or $205k/unit. The low-density complex consists of 10 three-story buildings on nearly 13 acres. Common area amenities include a resort-style swimming pool and spa with WiFi, a courtyard with fireplace and a dog park.
Zurich Alternative Asset Management sold 350 W Colorado Blvd, an 84k SF Class-A office building adjacent to Old Town Pasadena. The five-story property was 96.5% occupied at the time of sale. Tenants include Wells Fargo Bank, which occupies nearly 70% of the building, as well as accounting firm Holthouse, Carlin & Van Trigt. Originally built in 1985, the building boasts balconies on floors two through five, offering mountain and city views. Madison Partners' Bob Safai, Matt Case and Brad Schlaak repped the seller.
Westcore Properties bought a 211k SF, Class-A warehouse and distribution building in San Bernardino (1050 E Orange Show Rd) from International Building Group Jack Langston for $16.1M. The building is fully leased to Grant & Bowman, a toy distribution company. The property features two office pods, 38 dock-high doors, and a fully secured truck yard. Voit's Frank Geraci and Juan Gutierrez repped the buyer, while Jack Langston represented itself.
Gordon Brush Mfg Co, a major industrial brush manufacturer, bought a 183k SF industrial building in City of Industry (3737 Capitol Ave) to consolidate manufacturing operations from City of Commerce and Wisconsin. According to president Ken Rakusin, the company's expanding—buying new equipment, patenting products and looking to buy other brush businesses—in its bid to become the nation's largest Made in America brush manufacturer. Lee & Associates' Jeff Bethel and Jack Cline repped Gordon Brush. Jeff also repped seller Tracy Industries.
Just eight days after receiving the application, Eagle Group Finance funded a $7M, one-year IO loan for Premier Apartments to refi a portfolio of five low-income multifamily assets located near USC. The portfolio's 120 units are qualified for Section 8 housing assistance and are fully occupied. While the properties are in good condition, Eagle president Brian Good says a portion of the loan proceeds will be used for general property upgrades, including the installation of solar panels.
Last week The Ratkovich Co, with partners National Real Estate Advisors and Blue Vista Capital and architects Studio One Eleven, started tearing off the roof at The Bloc as part of a $180M renovation of the once-enclosed brick structure in DTLA. For three weeks, construction crews will remove sections of the roof over what will be a vibrant, open-air urban square upon project completion in late 2015. In addition, underground construction is expected to begin this month to create a pedestrian passageway linking The Bloc to the 7th Street/Metro Center Station, with completion estimated in December.
The Ratkovich Co, led by president Wayne Ratkovich (center), has secured more than two dozen new office and retail tenants for the project, such as the first West Coast outpost of Davio’s Northern Italian Steakhouse out of Boston, and TLT Food, a food truck turned fast-casual eatery. Tenants in The Bloc's "creative leaning" office building include Nordstromrack.com | HauteLook, which will move its HQ to 44k SF on two floors; and global communications firm Golin, a 24k SF, full-floor tenant. Other notable tenants include BOMA/GLA, ULI and Levin & Associates, led by architect and frequent Ratkovich collaborator Brenda Levin.
Some of the biggest players in the commercial real estate industry, including JLL's Carl Muhlstein (second from right, with Plaza Property Advisers' Colt Landreth, GRAY Real Estate Advisers' Ann Gray and Integra Realty Resources' Jim Andrews) networked during RICS' 2015 Summit of the Americas’ welcome reception recently at the Millennium Biltmore Hotel in DTLA. The org, formally known as the Royal Institute of Chartered Surveyors, brought together economists, business leaders, government officials and industry pros from around the nation and world to discuss key opportunities and trends shaping the future of the built environment.
One of the Summit's main events was the launch of RICS’ global report, RICS Futures, a culmination of three years of roundtables, workshops, surveys and seminars held on the global, national, regional and local levels. The closing presentation on Day 3 featured a call to action by the US Army Reserve’s facilities chief for the private sector to use its creativity and expertise to help the government make strategic decisions on its real estate assets. Other takeaways included the need for the public and private sectors to work together to meet the world’s infrastructure and transportation challenges, and the importance of understanding and using big data.
Hudson Pacific Properties broke ground yesterday for ICON, a 14-story, 323k SF creative office building at HPP's Sunset Bronson Studios in Hollywood. The new building boasts a one-of-a-kind staggered, tiered design by Gensler. The structure features 20k SF floor plates with 43-foot column-free spans, floor-to-ceiling windows with panoramic views, and terraced balconies on multiple floors; it will be built to LEED Gold Standards.
Stephanie Skrbin, formerly with Lee & Associates–L.A. North/Ventura, joined Avison Young as a principal in LA. She'll team up with LA urban retail properties leader Derrick Moore. The pair will focus on developing AY’s institutional retail leasing and investment practice in SoCal and mid-cap retail product and clientele, with Stephanie serving clients throughout Greater LA while Derrick continues to represent Downtown retail investors, owners and tenants.