The 10 Most Expensive Commercial Real Estate Transactions in LA County in 2018
Happy Holidays from CBI
This year we’ve seen a lot of transactions with some record sales. We always like to look back through the year’s transactions to see what properties set the records. We’ve compiled a list of the top ten transactions, by dollar volume.
The list was compiled from information provided by CoStar, and includes the following asset classes: office, mixed-use, retail, multifamily, and hospitality.
Transactions include property sold only between January 1 and December 31, 2018 but do not include any bundled portfolios.
The Promenade at Downey 8840-8850 Apollo Way
Sale Date: 09/26/2018
Sale Type: Investment
Escrow Length: 150 days
RBA: 482,376 SF
Sale Price: $172,000,000-Confirmed
Land Area: 43.78 AC (1,907,196 SF)
Price/SF: $356.57
Interesting Facts About This Property:There is 105,000 sf of shop space with an additional 40,000 sf of restaurant/retail pad opportunities that add enhanced amenities in a dynamic array of shopping, dining, service and entertainment alternatives that are a local and regional draw.
Additional Property Details: The sale is comprised of The Promenade at Downey shopping center totaling 446,557 SF located in Downy, CA; whereas, we show it totals 458,609 SF. The sales price was reported at $172 million or $385/SF. The subject property was not listed on the market for sale; therefore, the sale was an off-market transaction. The property was approximately 95% leased at the time of sale.
2. 800 N Brand Blvd Glendale, CA 91203
Sale Date: 11/29/2018
Sale Type: Investment
Bldg Type: Office
Sale Price: $160,000,000
Built in 1990
Price/SF: $303.41
Land Area: 4.08 AC (177,725 SF)
Percent Improved: 86.9%
Transfer Tax: $161,700
Total Value Assessed: $148,790,000 in 2018
Interesting Facts About This Property: It has two security guards on duty 24-hours a day, 7 days a week. There is no 13th floor in this building. This building has achieved the BOMA 360 designation in Q4 2013.
This building was awarded an Energy Star label in 2007, 2008, 2009, 2010, 2011, 2012, 2013, 2014,2015,2016, 2017 and 2018 for its operating efficiency.
In 2014, this building was awarded LEED certification at the Gold level by the U.S. Green Building Council.
3. The AirFlyte 2230 E. Imperial Hwy. in El Segundo, CA
Sale Date: 05/17/2018
Sale Type: Investment
RBA: 571,631 SF
Sale Price: $167,500,000-Confirmed
Land Area: 6.15 AC (268,064 SF)
Price/SF: $293.02
Interesting Facts About This Property: The sales price was confirmed by one of the listing brokers and the buyer. The sale is comprised of The AirFlytre office campus, three office buildings totaling 549,222 SF located at 2200, 2222 and 2230 E. Imperial Hwy. in El Segundo, CA. The sales price was reported at $167.5 million or $305/SF. The subject property was fully leased to DirecTV, a subsidiary of AT&T Inc., and Raytheon Co. at the time of sale.
The motivation for the seller was a culmination of a multi-year repositioning effort, inclusive of extensive architectural planning and over 237,000 SF of new leasing that positioned the property well for sale to a wide range of investors.
The motivation for the buyer was a value-add opportunity to reposition the property through a significant renovation of the campus.
Additional Property Details: This property is a 798,259 square-foot, 10-floor building. The top two floors, comprised of 140,175 square feet is office space while the remaining 658,084 square feet is 8 floors of parking for the adjacent Direct TV and Raytheon buildings. Floors 9 & 10 are leased by Raytheon, a defense and aerospace systems provider. This building is situated on a portion of 6.14 acres.
Building Park was formerly known as The AirFlyte.
4. Water's Edge 5570 Lincoln Blvd. in Playa Vista, CA
Buyer: Wedge Office LLC
Total Cost: $190,000,000-Confirmed
Total Space: 2.62 acres of land
Category: Office Building
Interesting Facts About This Property: The sale is comprised of the Water's Edge, two existing office buildings totaling 259,164 SF located at 5510 and 5570 Lincoln Blvd. in Playa Vista, CA; whereas, we show they total 258,993 SF. The sale also includes land entitled for $161,000 SF office building on an available 2.42 acres of land. The sales price was reported at $190 million. The first year pro forma cap rate was reported at 3.6% with current below market rents.
Additional Property Details: The subject property was 89% leased at the time of sale. The escrow period was extended to accommodate some structural requirements on both sides. The property contains no sales conditions that would have affected the sales price, and contains no deferred maintenance.
The motivation for the buyer was a trophy property and development in Playa Vista, CA.
5. Westside Pavilion 10900 W. Pico Blvd. in Los Angeles, CA
Sale Date: 09/04/2018
Sale Type: Investment
RBA: 520,237 SF
Sale Price: $190,000,000 - Confirmed
Land Area: 9.17 AC (399,637 SF)
Price/SF: $365.22
Additional Property Details: The total estimated project costs including the asset value at contribution was reported in the range of $425 to $475 million with each partner contributing their pro rata share. The construction is expected to be completed by mid-2021. Hudson Pacific Properties will serve as the joint venture's Managing Member and the property's day-to-day operator and developer.
The sales price was reported at $190 million or $365/SF for the full value of the property. The buyer acquired a 75% interest in the property for a recapitalization of the asset in which the seller, The Macerich Company, brought in a joint venture partner, Hudson Pacific Properties, to redevelop the property into 500,000 SF of state-of-the-art creative office space, while retaining approximately 100,000 SF of existing entertainment retail space. The Macerich Company kept a 25% interest in the property. The subject property was not listed on the market for sale; therefore, the sale was an off-market transaction. There were no brokers involved in the transaction.
Interesting Facts About This Property:
The motivation for the seller was the joint venture will enable them to maximize the value of this incredibly well-situated real estate with dynamic new uses, since Hudson Pacific Properties brings great expertise in the creative office space segment, and they are pleases to partner with them on this exciting, high visibility project.
The motivation for the buyer was a perfect opportunity for them to reposition a marquee asset in a premier location. The project is poised to capture the strong demand from tenants for creative office space on the west side of Los Angels. They look forward to working with Macerich in making signature improvements to the property, which they believe will greatly benefit the surrounding community.
The Landmark Film Center at Westside Pavilion is one of the leading arts and entertainment venues in Los Angeles. This world- class art-house, developed in partnership with independent film exhibitor Landmark Theatres, will be the largest theater dedicated to independent films in the United States. From the wine bar and lounge to fine dining restaurants and the exceptional quality and selection of the films screened, visitors to the Landmark Film
6. 468 N Rodeo Dr, Beverly Hills, CA 90210
Sale Date: 09/14/2018 (135 days on market)
Sale Type: 120 days
Bldg Type: $245,000,000-Confirmed
Year Built/Age: $300,000,000
GLA: $11,010.74
Land Area: $16,060.61
Sale on 9/14/2018 for $245,000,000 ($11,010.74/SF) - 22,251 SF Retail Storefront Retail/Office Building Built in 1997
Interesting Facts About This Property: The motivation for the buyer was most likely they decided to acquire a suitable building outright for the various brands it owns. That way they never have to worry about rent increases or when a lease comes up. In addition to Louis Vuitton, LVMH also owns Marc Jacobs, Givenchy, Fendi, Christian Dior, Celine, Kenzo, Parfums, TAG Heuer, Sephora, Bvlgari, which has a store location nearby at 401 N. Rodeo Dr., and Dom Perignon.
Additional Property Details: The sales price was confirmed by a reliable source. The sale is comprised of the Brooks Brothers storefront retail building totaling 22,251 SF located at 468 N. Rodeo Dr. in Beverly Hills, CA. The subject property was listed on the market at $300 million, and sold for $245 million or $11,011/SF. Brooks Brothers was vacating around the time of sale.
7. 25399 The Old Rd - IMT Stevenson Ranch Stevenson Ranch, CA 91381
Sale Date: 09/12/2018 (100 days on market)
Sale Type: Investment
Escrow Length: 40 days
Bldg Type: Apartments
Sale Price: $166,515,000-Confirmed
Year Built/Age: Built in 1992, Renov 2010 Age: 26
RBA: 418,351 SF
Price/SF: $398.03
Land Area: 32.23 AC (1,403,747 SF)
Sale on 9/12/2018 for $166,515,000 ($398.03/SF; $326,500/Unit)
Additional Property Details: The sales price was confirmed by the broker and the buyer. The sale is comprised of The Summit at Stevenson Ranch Apartments, which is now called IMT Stevenson Ranch Apartments after the sale, totaling 510 units located at 25399 The Old Rd. in Stevenson Ranch, CA. The sales price was reported at $166,515,000 that equates to $326,500 per unit. The subject property was 95% leased at the time of sale.
Interesting Facts About This Property: The motivation for the seller was the end of their hold period. The motivation for the buyer was a strategic investment for their fund.
8. 1000 Wilshire Blvd - The Wedbush Center Los Angeles, CA 90017
Sale Date: 02/27/2018 (93 days on market)
Sale Type: Investment
Escrow Length: 60 days
Bldg Type: Office
Sale Price: $196,000,000-Confirmed
Year Built/Age: Built in 1987 Age: 31
RBA: 477,774 SF
Price/SF: $410.24
Land Area: 0.97 AC (42,253 SF)
Price/SF Land Gross: $4,638.70
Additional Property Details: The sale is comprised of the Wedbush Center, a 476,491 SF Class A trophy office building located at 1000 Wilshire Blvd. in downtown Los Angeles, CA. The sales price was reported at $196 million or $411/SF. The subject property was 86% leased to a strong roster of tenants including anchor financial services firm Wedbush Securities.
Interesting Facts About This Property: The property recently benefited from a $4 million renovation focused on re-positioning the building's ground floor lobby areas including the addition of a full-service bar and cafe restaurant, further reshaping the building while adding a new exciting amenity.
9. 433 N Camden Dr - Wells Fargo Bldg Beverly Hills, CA 90210
Sale Date: 08/30/2018 (124 days on market)
Sale Type: Investment
Escrow Length: 90 days
Bldg Type: Office
Sale Price: $193,000,000-Confirmed
Year Built/Age: Built in 1972, Renov 2003 Age: 46
RBA: 207,432 SF
Price/SF: $930.43
Land Area: 1.04 AC (45,302 SF)
Price/SF Land Gross: $4,260.26
Percent Leased: 94.0%
Percent Improved: 82.5%
Pro Forma Cap Rate: 4.00%
Total Value Assessed: $27,383,946 in 2017
Actual Cap Rate: 2.95%
Improved Value Assessed: $22,590,430
Sale Conditions: 1031 Exchange
Land Value Assessed: $4,793,516
Additional Property Details: The sales price was confirmed by the broker and the buyer. The sale is comprised of the Wells Fargo Bldg., a 12-story office building totaling 207,432 SF located at 433 N. Camden Dr. in Beverly Hills, CA. The sales price was reported at $193 million or $930/SF. The subject property was 94% leased at the time of sale. The property contains no deferred maintenance.
The in-place cap rate was reported at 2.95%; therefore, we were able to calculate the NOI. The vacancy factor at 6%, and total operating expenses at $15/SF/yr with property taxes at $1.59/SF/Yr.; therefore, we were able to calculate an approximate GSI. The in-place cap rate was so low due to the property's location in the Golden Triangle and below market rents.
Interesting Facts About This Property:
Often referred to as the "Wells Fargo Building", a result of the banking tenant's rooftop signage. The motivation for the seller was retirement. The motivation for the buyer was a value-add opportunity to reposition the asset through a renovation program. The building hasn't been renovated in 15 years and falls 25% below the market's average rent of $48.24/SF.
Though specific redesign plans are not yet finalized, StarPoint's initial plans include transforming a 6,500 SF deck on the fourth floor to a world-class, open-air lobby that emphasizes natural light and features sculpture gardens and an improved facade. This was their upleg in a 1031 exchange.
10. 6250 Canoga Ave - Triana at Warner Center Woodland Hills, CA 91367
Sale Date: 07/13/2018 (90 days on market)
Sale Type: Investment
Bldg Type: Apartments
$157,000,000 - Confirmed
Year Built/Age: Built in 2008 Age: 10
RBA: 484,354 SF
Land Area: 5.94 AC (258,585 SF)
Percent Improved: 74.8%
Total Value Assessed: $122,669,968 in 2017
Improved Value Assessed: $91,712,599
Land Value Assessed: $30,957,369
Land Assessed/SF: $119.00
Additional Property Details: The sales price was confirmed by the listing broker, the seller and the buyer. The sale is comprised of the Triana at Warner Center Apartments totaling 362 units located at 6250 Canoga Ave. in Woodland Hills, CA.
The sales price was reported at $157 million that equates to $433,702 per unit. The subject property was approximately 95% leased at the time of sale.
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Thanks for reading and stay tuned for more CBI Blogs in 2019!
Happy Holidays From,
Commercial Brokers International