This Week's LA Deal Sheet
Oh, those Millennials—they'll whip out their cellphones to snap the dish in front of them in a restaurant, but cook a meal at home? Not so much. So Hollywood's Gershwin Apartments, where a majority of the units are efficiency units without kitchens in an urban, walkable neighborhood, hits all the right notes.
Recently, we chatted with George Smith Partners principal Shahin Yazdi, who arranged $20.9M in bridge financing through a debt fund for Massie Capital to acquire the 163-unit property for $25M. Shahin tells us the project is targeted toward one of the hottest groups right now—young professionals who are rarely home and see their pads as just a place to sleep. "They're OK giving up the kitchen," he says. "They eat out most nights anyway." Or, they take advantage of another big trend: food delivery services that bring, on demand, fresh food to your doorstep within minutes. They're also OK with giving up cars—the Gershwin is close to 100% occupied despite having no parking. Tenants bike, walk or take public transit. "As the world changes, so does the real estate to accommodate it," Shahin notes.
Formerly known as the Gershwin Hotel, the historic property (5533 Hollywood Blvd) was built in 1927. It was redeveloped as apartments in 2013 by CIM Group (which just completed a retail project next door). It offers a mix of small units, including 105 efficiency units with kitchenettes totaling less than 350 SF. Shahin says lenders don't look favorably on units that don't have kitchens, but as the product becomes more popular, it's becoming easier to finance. Massie's investment partners on the deal, Glenn and Shannon Dellimore, are the founders of the GlamGlow line of skin care products that sold to Estée Lauder in January. The new owners plan to make the Gershwin's lobby more open and welcoming. Shahin says that even now, after work tenants hang out in the lobby, where they network, talk and build a community.
Montana Avenue Capital and a Roxborough Group affiliate bought 1700 Walnut Ave, a six-story office building and separate six-story parking structure in El Segundo, from USAA Real Estate for $33.5M. The building contains more than 119k SF and is 99% leased to tenants including Fuhu and iSupply. Recent renovations have created a blend of traditional office and repositioned creative office space, according to CBRE's Kevin Shannon, who repped the seller along with Ken White and Mike Moore. Creative office space has a 30% rent premium compared to traditional office space in El Segundo, he says.
Orchard Adams LLC bought Palisades Apartments, a 28-unit apartment building in LA (1210–1226 W Adams Blvd within walking distance of USC), from Palisades USC LLC for $12.6M or $450k/unit. CBRE’s Laurie Lustig-Bower, who repped the seller along with Kamran Paydar, says there is tremendous demand for off-campus housing near USC. Built in 2002, the fully occupied Palisades features spacious units, gated parking and furnished rooftop decks.
Totex Manufacturing Inc, a designer and manufacturer of battery packs and chargers, bought a former General Motors R&D facility at 3040-3050 Lomita Blvd in Torrance for $9.8M for an expansion of its area manufacturing HQ (located across the street at 2927 Lomita). The Klabin Co/CORFAC International's Todd Taugner, Frank Schulz, David Prior and Patricia Wisman repped the buyer while Colliers International represented seller Lomita Partners LLC. Occupancy: January 2016. Totex also has major manufacturing facilities in Hui Zhou, China.
San Sebastian Properties bought Villa Grande, a 78-unit apartment property in Reseda, for $21.5M. Built in 1987, the complex consists of all two- and three-bedroom individually deeded townhomes. Berkadia's Dean Zander and Vince Norris listed and sold the property, marking their seventh sale in the SF Valley in Q3. The property (Yolanda Avenue and Saticoy Street) attracted 120 interested buyers representing a variety of capital sources, including private investors, sponsored equity groups and condo converters. The buyer plans to spend $15k/unit in upgrades.
Hotel D. Artistes LLC sold its 3,730 SF 402 E First St building in Long Beach for $2.1M. Coldwell Banker Commercial BLAIR WESTMAC's Becky Blair and Sheva Hosseinszadeh repped the seller. Steve Warshauer, also with BLAIR WESTMAC, and Keller Williams' Coralyn Wahlberg represented the buyer, 402 East First LLC.
Medical office developer Yvonne Yiu bought 18k-plus SF at 120 W Hellman Ave in Monterey Park for $2M or $113/SF. According to CBRE healthcare expert Bryan Lewitt, who repped the seller along with Chris Isola, this marks the highest price per square foot to date for San Gabriel Valley medical land. The site is adjacent to the Alhambra Hospital. The sale included plans and permits for a 30k SF MOB.
1200 N Cahuenga Blvd in Hollywood, home to an Armenian school and cultural center operated by Tekeyan Cultural Association since 1981, changed hands to Silicon Valley-based private school operator Stratford School. The buyer plans to open its new LA location in August, offering classes for students from preschool through middle school. The 1.2-acre campus features two buildings totaling 30k SF, subterranean parking, an outdoor play area and a theater. Christine Deschaine and Fred Cordova of Kennedy Wilson represented Tekeyan.
Brent Sprenkle of Berkadia sold a pair of apartment buildings totaling 20 units—1447 (above) and 1621 S Crescent Blvd—for a combined $5.4M. The buyer was in a 1031 exchange from a Louisiana land sale and was looking to reinvest locally. The seller owned and operated the properties for 30 years.
Koloe LLC bought three office buildings totaling 7,210 SF in Studio City (3751-3757 and 3759 Cahuenga Blvd W) for just under $2.6M. The property was 50% occupied by a television production company at the close of escrow, according to Charles Dunn Co's Stacy Vierheilig-Fraser, who repped the buyer as well as the seller, a private investor. The site consists of a two-story creative office building and two single-story buildings with outdoor courtyards. The buyer plans to occupy the remaining space as an owner/user for his mortgage company, Standard Home Lending, which is relocating and expanding from 13223 Ventura Blvd.
The Pacific Design Center’s RedBuilding inked two leases with creative firms. Abrams Artists Agency, a diversified talent and literary agency, signed a long-term lease for more than 15k SF on the 11th floor. Clique Media, operator of fashion and lifestyle websites (WhoWhatWear.com, MyDomaine.com), is expanding into 10k SF on the ninth floor (giving the advertising firm a total of 30k SF). Savills Studley's Robert Cavaiola repped Abrams while Cresa LA/Travers Cresa's Marc Bretter repped Clique. Building owner Cohen Brothers Realty was represented by Marc Horowitz in-house and the RedBuilding’s JLL brokerage team led by Josh Wroble.
eggslut, a gourmet breakfast food truck that transitioned to a stall in DTLA's Grand Central Market, just got cracking on its first standalone location. This second brick-and-mortar shop is a 1,300 SF space in Venice (1611 Pacific Ave), two blocks from the historic Venice sign over Windward Avenue. RKF's Marc Finkel repped eggslut, while Conroy Commercial's Brad Conroy, Jeff Grey and Lauren Aboulafia repped the landlord.
New leases at Vannord, a 90k SF neighborhood shopping center at Van Nuys Boulevard and Nordhoff Street in Panorama City, include beauty supplies, an optical store and a credit union. Colliers Retail Foresight's Michael Bohorquez and James Rodriguez repped the landlord and tenant in each transaction. The duo also repped the landlord in a 17k SF lease in Paramount by WSS (Warehouse Shoe Sale), a regional shoe store chain. Rosano Partners' Sam Kangavari repped the tenant in the $2.8M deal.
CBRE Capital Markets’ Debt & Structured Finance team arranged $156.8M in financing for the acquisition of a six-property, 1,413-unit multifamily portfolio in Washington and Oregon. Brian Eisendrath and Cameron Chalfant arranged the financing on behalf of LA-based TruAmerica Multifamily, which plans to implement a value-add renovation program to reposition the assets. Four properties received seven-year, fixed-rate loans with three years IO and a blended interest rate of 3.85%. The remaining two properties received floating-rate loans with three years IO and a starting rate of 2.6%.
Xebec acquired 12-plus acres in Vernon (5370 Boyle Ave) to develop a 203k SF spec industrial warehouse. The $29M project dubbed Boyle at 54th will feature just under 13k SF of office space, 25 dock-high positions, 32-foot clear height and a 130-foot truck turning radius, plus enough land to park 294 vehicles. CBRE's John Privett and Cameron Merrill, who repped the buyer as well as seller Pechiney, will market the project. Equity partner American National is providing the construction loan. Xebec Building Co will be the GC. Construction is slated to begin in Q4.
A 110k SF HQ in El Segundo has been completed for JustFab, an e-commerce company and lifestyle brand. Landlord SSV Properties transformed old aerospace and defense contractor facilities to create next-gen office space. The new digs feature an open floor plan to promote collaboration, custom storage units, and a large production studio area. The five video and photo studios allow JustFab to produce all commercials in-house at a substantial cost savings. The project was designed by Moshiri Associates and built by Clune Construction, with JLL also on the team.
Bringing college access to the fore, the Posse Foundation raised $55k in its third annual golf tournament, chaired by Avison Young managing director Jonathan Larsen (center). More than 150 participants from the likes of Brookfield, Kilroy and SAA participated in the event, which was held at the Calabasas Country Club. The winning foursome included Jonathan's son Chandler Larsen, an associate with the firm, and AY urban retail guru Derrick Moore. Other AY pros who participated included Stan Yoshihara and Eric Moore, left. Jonathan notes the Posse Foundation has helped more than 6,200 disadvantaged public high school students get a "full ride, four-year college education with a 92% graduation rate."
A full turnout of 144 commercial brokers and related industry pros gathered at the Industry Hills Golf Club for the 32nd annual AIR Golf Classic. (No, that's not where you swing your arms in the air with a pretend club.) The event supports AIR Commercial Real Estate Association's Jules B. Altemus Scholarship Fund, which helps deserving college students studying commercial real estate. Above, Lynn LaRocque of DAUM'S Woodland Hills office admires Newport Beach colleague (and daughter) Jackie LaRocque's style-setting hosiery while Bob Hoyer of Delphi Business Properties looks on.
The Altemus Co's Mike Benesch and Robert Laswell are stunned as four-time long drive champion Frank Miller tees off on the 558-yard first hole, sending the ball some 370 yards down the fairway on the par 5 hole. The all-day event also included a reception, a gala awards banquet, and a raffle featuring such swag as a 55-inch Samsung TV and a trip to the Bahamas.
Chalvis Evans joined CBRE as an SVP in the LA North office, focused on investment sales and tenant representation. He and his team of Kyle Barratt and Gerard Poutier come from the Pasadena office of Coldwell Banker Commercial, where Chalvis closed more than $125M worth of transactions in the San Gabriel Valley last year.
Oakwood Worldwide promoted Marina Lubinsky to SVP, shared services and chief information officer. Previously SVP, CIO and interim human resources lead, she'll oversee the company's global sales and service center operations in Phoenix while continuing to lead global IT and human resources. Oakwood also promoted 26-year veteran Chris Brenk to SVP, financial services and chief financial officer, from interim CFO. Her responsibilities include enhancing Oakwood Worldwide’s global pricing and payment system, which expands multi-currency billing to clients.
Mark Witsken, formerly with Keller Williams Commercial, joined Stepp Commercial as a VP responsible for multifamily sales in the greater Long Beach area. While the firm up till now has focused its efforts on properties with more than 10 units, he'll emphasize buyers and sellers of smaller apartment assets who seek to trade into larger properties through a 1031 exchange.