This Week's LA Deal Sheet
The Bicycle Hotel & Casino has been completed, adding a seven-story, 99-room boutique lodging and luxury amenities to the venerable Bell Gardens card club. Last week's grand opening ceremonies drew a full house of dignitaries.
R.D. Olson Construction president Bill Wilhelm, whose company served as general contractor on the $45M project, tells us the new facility features a bevy of bells and whistles. The 118k SF hotel's array of amenities include an elevated pool deck with function space, new VIP gaming areas, a full spa, state-of-the-art fitness center, and more than 15k SF of meeting and event space. In addition, there are new bars and restaurants, including the Bike Brewery, and an on-site bakery. The 99 guest rooms include 29 suites, the largest of which boasts Jacuzzi tubs. R.D. Olson, which has an affiliated company that develops hotels, brought to the table a strong understanding of how the properties work from an operational, long-term-hold standpoint, he says.
Officials at the grand opening included Gov. Jerry Brown, who also came out for the groundbreaking nearly two years ago. As he said back then, a major draw is job generation in a city that has seen high levels of unemployment. Bill says close to 200 new positions have been added within the hotel-casino itself, on top of the 300 construction-related jobs that were created.
Vegas-style showgirls glammed up the festivities. (Just like Kenny said, you've got to know when to hold 'em--otherwise, you might be spelling out "icycle.") The new hotel is connected to the existing casino, which continued to operate 24/7 during construction. Bill says the company was conscientious of the guest experience, and with a couple thousand patrons on any given day, the stakes were high. The project required heavy coordination and weekly meetings with security, the casino's GM and all the different staff heads. On grand opening night, "We were still getting guys out the back door as the guests were coming in the front door."
The project was designed by Irvine-based Lee & Sakahara Architects. Bill says the contractor continues to see growth in its hospitality business, despite some concerns about saturation in some areas. Whether it's ground-up construction, renovation, or repositioning and conversion, the industry is trying to capitalize on the market and get heads on beds before any slowdown that may surface down the road. Luckily, R.D. Olson's clients in other industries such as higher education and healthcare are in an expansion mode. A case in point is Chapman University's Hilbert Museum of California Art, slated to open next Spring in a renovated industrial building in Orange. The company's also building timeshares, student housing and other multi-unit product.
SALES
Brookfield Property Partners division IDI Gazeley bought an industrial building in Cerritos (16610 Marquardt Ave) for $8M in cash. The building, which contains just over 73k SF, is fully leased to Revolve Clothing. CBRE’s Shin Kim repped the buyer as well as the seller, SH Asset Management LLC--the real estate holding company of Seoul-based gel caps manufacturer Suheung Capsule Co Ltd previously occupied the building. Shin says IDI Gazeley closed in just 15 days, enabling the seller to defer capital gains taxes through a reverse 1031 exchange. He also represented SH Asset Management in the Revolve lease while colleague Chris Ehrlich repped the tenant, an online clothing retailer.
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Rubikon Development bought a 19k SF office building in Sherman Oaks (13412 Ventura Blvd) from Dixie Properties for $7.2M, in a rare opportunity that attracted multiple offers. According to Lee & Associates-LA North/Ventura's Scott Romick, who repped the seller, no more than 10 office buildings of 9K to 20k SF on Ventura Boulevard between Sherman Oaks and Studio City have traded in the past decade. Scott also is the leasing agent for the building, which is fully occupied with seven tenants. Anthony Palermo of Coldwell Banker Beverly Hills represented the buyer.
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Cypress School District bought the 16-unit Azure Apartments in Redondo Beach (2704 Vanderbilt Lane) and the 65-unit Coast Apartments in Costa Mesa (400 Merrimac Way) for a total of $26.7M or $329k/unit. Revenue from the investments will be used to support the district's educational programming. NAI Capital's Christopher Arvizu and David Knowlton repped the buyer. Funds for the purchase came from the sales of the two surplus school sites that will be redeveloped as single-family housing.
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Canyon Multifamily Impact Fund expanded into South Florida with the acquisition of Palm Islands Apartments in Pompano Beach, a 402-unit complex consisting of 12 two-story buildings. CMIF, a JV between Canyon Partners Real Estate and Citi Community Capital, invests in high-quality workforce housing in underserved communities across the US. The fund plans to spend several million dollars in a capital improvement plan to enhance the property through physical upgrades, and implement community programming and services focused on education, healthcare, sustainability and security.
LEASES
The Ratkovich Co signed 26k SF of leases at 5900 Wilshire, bringing the 31-story office building to just over 95% occupancy. The six new leases span the design, tech and financial services industries, including digital creative boutique WatsonDG (5,000 SF); talent management firm Trademark Talent (1,500 SF); and Vision Critical, a developer of cloud-based intelligence platforms (4,000 SF). With these additions, about 70% of the Miracle Mile building's tenant roster is comprised of media, entertainment, art and design firms. Ratkovich COO Clare De Briere notes the submarket is attracting both newcomers as well as mainstays from neighboring communities in Hollywood and Beverly Hills.
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Deutsch Inc, a multi-disciplinary marketing communications agency, signed a 10-year lease for 12901 Jefferson in Playa Vista, in an expansion of its LA HQ located across the street. The former production studio wil be converted to a 48k SF campus for Deutsch, part of the Interpublic Group of Companies, with occupancy slated for March. The new facility will include a custom-designed soundstage and several freestanding mezzanine areas. A partnership between Canyon Partners Real Estate's Canyon Catalyst Fund and Pacshore acquired the building in February 2015.
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Interpublic Group of Companies signed an 11-year, 150k SF lease at The Plaza in Century City (1840 Century Park East), marking Century City's largest office relocation in more than a decade. Interpublic, whose advertising and PR brands include PMK•BNC, Weber Shandwick and Rogers & Cowan, will move 10 agencies with 700 employees from the Pacific Design Center in West Hollywood. Newmark Grubb Knight Frank's Steve Kolsky and Henry Kobrin repped the tenant. With eight full floors and ground-floor space as well as signage atop the 1840 tower, IPG will be The Plaza's largest tenant. NGKF initially worked with IPG in 2004 to consolidate seven of its agencies into 145k SF at the PDC.
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DaVita Kidney Dialysis leased more than 13k SF at Sherman Way and Van Nuys Boulevard in Van Nuys. Colliers Retail Foresight's James Rodriguez and Michael Bohorquez repped the landlord. The pair also represented the landlord in La Monarca Bakery's 1,550 SF lease at Rosemead Boulevard and Mines Avenue in Pico Rivera. The tenants were represented by CBRE and NAI Capital, respectively.
CONSTRUCTION/DEVELOPMENT
Bernards Topped off a new health, fitness, dance and physical education building at Santa Monica College. The three-story facility, which contains nearly 64k SF, was designed by Gensler to LEED Silver criteria. Sustainable measures include natural lighting and ventilation and solar-heated hot water. The building also will house a new central plant facility providing chilled water and thermal energy storage to multiple campus buildings. The new building will be part of an existing pavilion and gym, of which Bernards is renovating nearly 19k SF. The builder's also under construction on a new $18.4M Music and Performing Arts Complex at the SMC Madison Arts Campus, designed by DLR Group.
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Majestic Realty Co acquired 530 acres near Denver to expand its Majestic Commercenter, bringing the business park's total footprint to more than 1,500 acres. Geared toward e-commerce, the expanded development is designed to accommodate up to 7M SF at build-out with four 1M SF buildings. Cushman & Wakefield's Kirk Vanino and Taylor Hazard represented the private seller, a third-generation farm family, and also will work with Majestic to market the new site. Majestic has completed 14 buildings totaling 3.5M SF in the complex since 1995, including a 450k SF warehouse scheduled for completion later this month.
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The Wolff Co plans to break ground on six seniors apartment communities in Q1, including a 136-unit development in Oxnard (2850 N Ventura Rd), boasting amenities like fitness/aerobics centers, indoor swimming pools, theaters, art studios, lounges and full commercial kitchens. The projects, which also include communities in Washington state, Nevada and Colorado, represent the initial wave of a large investment by Wolff in the independent and assisted living market. The Scottsdale, AZ-based private equity firm plans to invest $300M to $400M annually on development and purchases of existing communities.
EXECUTIVE NEWS
Mario Alvarez and Andrew McLean joined NAI Capital’s Ontario office as SVPs, bringing more than 25 years of combined experience in retail brokerage. Mario previously served as director of commercial real estate at Guardian Cos, responsible for investment strategy, operations, and leasing negotiations. Andrew, who comes from Lee & Associates, has advised tenants on site selection and worked with developers to identify potential markets.
