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9/27/16
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A 3k sf retail property along Santa Monica’s 3rd Street Promenade sold for $15.6 mil, or $5,200/sf. The property is currently leased to luxury electric car company Tesla Motors.
The property, located at 1227 3rd Street Promenade, offers a bottom-floor store front and is surrounded by other trendy retail, such as Adidas, Nordstrom and Tiffany & Co., and urban restaurants such as the Water Grill. The building, constructed in 1938, underwent a complete revamp in 2012 when it was converted into Tesla’s state-of-the-art showroom.
CBRE’s Timothy Bower, Ken McLeod and Tim Kuruzar represented the buyer, a joint venture between KLM Equities and Harlington Realty LLC, and the unnamed seller in the transaction. The transaction is one among only a few on 3rd Street Promenade, where property ownership tends to be long term and many buildings are generational holds. The street boasts dozens of international retail tenants adjacent to one another, presenting a significant barrier to entry to a market that attracts an estimated 40,000 people a day in foot traffic.
The street is popular with affluent residents – the area boasts an average household income of $91,499 within a one-mile radius – as well as visiting tourists. Santa Monica attracts more than 7.3 million people annually from outside Los Angeles County.
The property sits close to the Metro Expo Line which connects Los Angeles’ Westside by rail with Downtown Los Angeles, Hollywood, the South Bay, Long Beach, Pasadena and the Valley. Its final stop is located just three blocks from the property.
“The property is perfectly situated in the epicenter of Southern California’s premier shopping destination,” said Kuruzar. “Santa Monica is experiencing a significant economic growth trend that is expected to continue in the years to come.”
Downtown Santa Monica has seen a wave of redevelopment - historic and functionally outdated buildings have been transformed, including a $50 mil dollar restoration of the iconic City Hall building, a $55 mil, seven-acre redesign of Palisades Park and the $265 mil renovation of the Santa Monica Place mall.
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