Commercial property sales are surging in downtown L.A.’s Arts District as more developers and investors see potential in the once heavily industrial area.
Among the latest deals was last month’s purchase of a former Coca-Cola Co. production facility at 963 E. Fourth St. The property was sold for $19 million to real estate investment firms GPI Cos. of Los Angeles and Atlas Capital Group of New York.
Coca-Cola sold the three-story, 124,000-square-foot warehouse to Cecilia Siu Lee of Pasadena 20 years ago for $2.9 million. About a year ago, Lee’s Harmony Investments hired CBRE Group Inc. to market the property for sale, according to CoStar Group Inc. Lee & Associates represented the buyers.
The purchase, which closed March 20, came as news surfaced that San Francisco firm Shorenstein Properties is under contract to purchase a former Ford Motor Co. factory just blocks away for an estimated $37 million. Both sites are said to have significant redevelopment potential.
Drew Planting, a founder and managing partner of GPI, said the firms plan to repurpose the building as creative office space, with restaurant space on the ground floor.
Big warehouses aren’t the only sites attracting investors to the area. In late February, a joint venture of L.A. investment firms Pacifica-PRG Investment and Management Inc. and Artist & Recreation purchased eight small buildings, totaling about 15,700 square feet, along with a large parking lot at the southwest corner of Seventh and Mateo streets for about $4.9 million. The property had been on the market for almost three years.
Ezra Callahan, an A&R partner who made millions as the sixth employee hired by social media behemoth Facebook Inc., said he’s optimistic about downtown.
“The evolution of the Arts District has been remarkable,” he said in a statement, “and we are excited to contribute to the energy and growth of the neighborhood.”
South Bay Beginning
A vacant office building in Long Beach sold late last month for $6.1 million, the first of what might be many properties to be snapped up by a newly formed joint venture.
Irvine investment firm Lotus Real Estate Partners, in partnership with Dallas real estate private equity firm TriGate Capital, bought the 83,000-square-foot Class B office building at 4031 Via Oro Avenue for less than $74 a square foot.
The seller, Charter Communications Inc., first acquired the nearly 30-year-old building 14 years ago for $6.9 million, or about $83 a square foot, according to CoStar.
It is the first regional deal for Lotus and TriGate, which plan to invest up to $60 million in office and industrial properties in Los Angeles, the Inland Empire and Orange County.
Brian Walker, a Lotus managing partner, said the two-story office property fits the firm’s portfolio criteria of value-add assets with strong upside potential. The firms have already begun a $1.6 million renovation of the property’s lobby and interior office areas. The building’s roof, mechanical systems and landscaping will also get upgrades.
“The asset was acquired well-below replacement cost and will be repositioned for lease to one or multiple tenants,” he said.
Clyde Stauff of Colliers International represented the buyer in the deal; Scott Becket of DTZ represented the seller.
Railway Residences
A 6.3-acre former industrial parcel in Temple City sold last week to a developer that plans to build a gated community of single-family homes.
Seal Beach residential developer Olson Co. purchased the oblong, railway-adjacent parcel at 9250 Lower Azusa Road from Ramshorn Corp. for $4.3 million, according to real estate sources.
The property, marketed by a local office of Colliers for nearly $4.9 million, was on the market for more than two years.
Scott Laurie, Olson’s chief executive, said his company planned to build 74 single-family attached and detached homes with recreational amenities on the site. The neighborhood, which will be called Linden Walk, will also require the construction of a sound wall to buffer noise from a Union Pacific Railroad line that flanks the property to the southeast.
Wayne Lambert, a senior vice president for Colliers, represented both the buyer and seller along with Scott Heaton and Joe Williams, also of Colliers.
Lambert said a zone change from heavy manufacturing to residential allowed the sale.
“I don’t think any of us thought it would take as long as it did to accomplish,” he said. “But we are pleased to have seen it through the maze of site-plan reviews, general plan amendments, environmental studies and public hearings.”
Staff reporter Bethany Firnhaber can be reached at [email protected] or (323) 549-5225, ext. 235.
