This Week's LA Deal Sheet
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Most people logically assumed tech firms would lease the new Class-A space at Runway Playa Vista. Instead, Cedars-Sinai Medical Group has snapped up the entire 32k SF for a new regional office, signing an 11-year lease.
Yesterday, we checked in with Lincoln Property Co SVP Kent Handleman (shown on a Bisnow Playa Vista panel a while back), who tells us the developer didn't set out to attract a medical user. However, it turns out creative attributes such as expansive balconies, big windows and high ceilings appeal to leading healthcare companies, too. Cedars will occupy the second, third and fourth floors of the mixed-use lifestyle center above 220k SF of retail and restaurant space, including the recently opened Whole Foods, Starbucks and CVS. Another factor: Runway easily satisfies Cedars' parking requirements, Kent says, because the project's parking was designed above code. CBRE's Todd Doney and Chris Isola repped Cedars.
Citing the new residential that's been built in Playa Vista in recent years, Kent calls Runway a strategic location for Cedars. It allows the medical provider to bring its world-class primary care and specialty services where people live and work—not just Playa Vista, but also communities like Culver City, Mar Vista, Marina del Rey, Playa del Rey and Westchester. In addition, he expects new synergies at Runway, which also includes 420 apartments, noting physician practices attract a visitor population that changes daily while Cedars benefits from a location in a vibrant retail center. The new facility is slated to open by the end of '16.
Gramercy Property Trust sold a single-tenant, triple net leased office building in Thousand Oaks leased to Anthem Blue Cross of California for $19.1M. The buyer is a private Asian investor advised by Ocean West Capital Partners. The building (2000 Corporate Center Dr) sits on more than 6 acres in a campus-style office park. Thousand Oaks and adjacent cities have a limited supply of large single-tenant office space, according to CBRE's Kevin Shannon, who repped Gramercy along with Brad Burton, Mike Moll, Ken White and Michael Longo, plus the local market leasing team of Tom Dwyer and Michael Slater. Anthem has occupied the building since 1993 and has over seven years remaining on the lease, which includes fixed annual rent increases of 3.9%.
Lawler Partners Ltd bought a 26-unit multifamily property in Palms (10770 Lawler St) from Veranda Investments for $8.3M. Warren Berzack and Stephen Geiger of Berzack Investment Property Advisors, a multifamily specialty group in Lee & Associates-LA North/Ventura, represented both private investors. According to Warren, the property boasts several compelling features, including rental rate upside, quality maintenance and management, and a location that offers easy access to the 405 and 10 freeways. The property received 10 bids in two weeks.
Neotech Products, which provides neonatal, pediatric and respiratory products worldwide, bought a 37k SF industrial building at 28430 Witherspoon Pkwy in Valencia for just over $4.8M. Heger Industrial’s Trevor Gale and Jon Reno repped the buyer, and Colliers International's John Erickson repped the seller. The transaction was the up-leg of Neotech’s 1031 exchange after selling a 22k SF building in Santa Clarita for nearly $2.8M in June.
NAI Capital's Kevin Kawaoka closed the sale of The Commodore, a 14-unit apartment complex in Beverly Hills, for a market low 2.5% cap rate. Tower Ventures LLC sold the property, located three blocks from the Golden Triangle, to local investor Paul Ling for $4.7M or $600/SF. The Commodore was built in 1961 with an average unit size of 562 SF. Kevin, who repped both sides, notes the cap rate was low going in, but the buyer plans to significantly renovate the units to gain top of the market rents for a long-term hold.
Rdbh LLC bought a 27-unit apartment property in Long Beach's Rose Park historical district (1101-1121 Gaviota Ave) from Lunar Bear Properties II LLC for nearly $4.88M. Stepp Commercial's Robert Stepp and Michael Toveg repped the buyer, while the seller repped itself. The property is 96% occupied and closed at a cap rate of 4.9%. Built in 1988, the property consists of two three-story buildings with upgraded units. According to Robert, turnkey properties with more than 20 units in this supply constrained market are hard to come by. The buyer plans to hold the asset long-term.
CBRE retail experts Maurice Nieman and Ian Schroeder closed the sale of a 17k SF Rite Aid property in Lamont (8008 Panama Rd) to a private buyer for just over $6.9M. The drug chain has more than 12 years remaining on its lease. The store features double drive-thru pharmacy windows and is the only national retail chain serving Lamont, a Kern County community about nine miles from downtown Bakersfield.
Kaiser Foundation Health Plan Inc will occupy a brand-new, 19k SF medical office building in Signal Hill under a 10-year lease valued at $6M. Construction of the two-story building (845 E Willow St) wrapped up last month. Lee & Associates Long Beach's Jeff Coburn and Shaun McCullough repped landlord 2H Property. JLL's Brian Denton and Kamil Agha repped Kaiser.
Three retail leases have been signed at a 137k SF former Kmart redevelopment site at Ventura Road and Channel Islands Boulevard in Oxnard. LA Fitness, Smart & Final and Star World, a new appliance and electronics company, each signed a 15-year lease and will occupy over 37k, 31k and 26k SF, respectively. Red Mountain Group is converting the property, which Kmart vacated in 2008, into an anchored multi-tenant retail center. CBRE retail experts Scott Siegel, Larry Tanji and Lisa Engel, along with Red Mountain's Kristin Ambrose, repped the owner. The new tenants are scheduled to open for business in 2016. Several restaurant and shop spaces ranging from 1,200 to 15k SF also will be available.
Due to popular demand, CBRE has extended the deadline for its 2015 Urban Photographer of the Year to midnight on August 14. So far, more than 12,500 entries have come in from 97 countries around the world, making this the best year since the competition began in 2006. This year's candidates snapped rush hour in India, a Chicago sunset and gridlock in Bangkok, to name a few subjects. The competition is free to enter and open to both amateurs and pros. CBRE says the total prize fund is worth over $78k, including the top prize: "a photography trip of a lifetime." For every entry, CBRE will make a donation to Plan International, a children’s development charity.
Marcus & Millichap named Damon Wyler regional manager of its Long Beach office. The retail specialist rejoined the firm this summer. He originally joined M&M's Newport Beach office in 1999 and left the firm in 2003 to pursue other interests in the real estate industry.
U.B. “Barney” Upton, a 45-year veteran of commercial real estate, joined the Palm Desert office of Lee & Associates. His specialties include new site or facility acquisition, surplus property disposal, land assemblage for development, and new development project marketing, among other expertise. He comes to the firm from Baxley Properties and before that was with Cushman & Wakefield for 25 years.