|
|
|
|
12/20/17
|
A Santa Monica office building is about to trade hands in a $117 mil, year-end transaction that values the property at over $1,000/sf. The 113k sf building, located at 520 Broadway, is being purchased by Olive Hill Group LLC, a Los Angeles-based private investor, operator and developer of commercial real estate.
The sale is expected to close in the next few days. The trophy building is being sold by Tishman Speyer. The NY-based firm acquired the property from Vornado Realty Trust in the first half of 2015 for around $90 mil, or $800/sf.
520 Broadway is located within walking distance of the recently opened Santa Monica Light Rail Station, the highly popular Third Street Promenade and nearly 350 new luxury multifamily units. Amenities include a four-story subterranean parking structure, 24-hour manned security, and a newly renovated exterior plaza.
Constructed in 1981, the office building underwent $13.2 mil in renovations in 2013. At the time of Olive Hill’s acquisition, the asset was 82% occupied. The property has been named BOMA of Greater LA’s “Outstanding Building of the Year” in both 2014 and 2017.
“This is a unique investment opportunity in a very supply constrained region of Silicon Beach,” said Michael Cho, President of Olive Hill Group. “520 Broadway is the only building of this size in the Downtown area not held by long-term ownership. Future acquisition opportunities in Santa Monica will be rare, which strategically positions this property to perform well over time.”
Cho explains that stringent development limits imposed by the City of Santa Monica in the 1980s have stifled office development in the market. As a result, there are currently no proposed new office developments within the Downtown region.
“Lack of supply will drive long-term demand for 520 Broadway, which also benefits from the tremendous growth of Silicon Beach, which continues to emerge as a hub for the technology, entertainment, and digital information industries,” says Cho who notes that the submarket is home to tech giants such as Google, Facebook, Snapchat, SpaceX, Amazon, and Microsoft.
In fact, tech funding in Los Angeles has expanded for the fifth year in a row, according to Tim Lee, Vice President of Corporate Development and Legal Affairs for Olive Hill Group.
“Last year, the tech sector in LA raised $4.2 bil, which was a 38 percent increase from 2015,” says Lee. “We expect this number to continue to climb, attracting more and more tech startups and companies to the region.”
Average asking rental rates in Santa Monica have reached new peaks, finishing the third quarter of 2017 at $6.04/per square-foot, per month, according to Transwestern’s most recent quarterly report.”
Olive Hill Group plans to hold the property long-term. The company also owns The Courtyard at Corporate Pointe, located in Culver City.
Eastdil Secured is representing Olive Hill in this transaction. Steven Edwards and Grace Winters of Manatt, Phelps & Phillips LLP is repping the buyer as legal counsel in the deal.
Headquartered in Downtown Los Angeles, Olive Hill Group is a privately-owned investor, operator, and developer of commercial real estate properties with a diverse portfolio of office, retail, hospitality, and multifamily properties. Since 1996, the firm and its affiliates have invested in more than $2.4 bil in commercial assets encompassing over 15 million msf.
|
|
 Return to the Archive page
|
|
|
|
|
|
Printer-friendly Version
Email an Associate
