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5/24/19
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The Gershwin Apartments, a 172-unit, mixed-use development in Hollywood, was acquired by a local real estate entity for $46 mil in a transaction that took just 35 days to close escrow. The property is located at 5533 Hollywood Blvd, east of the 101 Fwy at Western Ave.
Built during the Roaring Twenties Era, when it was known as the St. Francis Hotel, the five-story, red-brick building was extensively renovated over the years to become a mixed-use, multifamily community comprised of 163 residential units, nine neighboring bungalows, a 17k sf surface parking lot and 10.6k sf of ground-floor retail.
The apartments feature a mix of varying sizes ranging from micro lofts with kitchenettes to significantly larger two-bedroom bungalows with private yards. A total of 119 of the units have been completely remodeled.
The property is ideally situated in a pedestrian-friendly and transit-oriented neighborhood with superior access to the major employment and entertainment hubs of Hollywood, Universal City, Burbank, Glendale and downtown Los Angeles. The Gershwin is directly across from the Hollywood/Western Metro Red Line Station, within walking distance to ample amenities and is surrounded by iconic Los Angeles destinations.
Colliers Executive Vice President Kitty Wallace represented both the buyer and seller during negotiations that included a $1 mil non-refundable deposit and an all-cash offer for the Hollywood property. The seller was a private real estate investment company.
“The buyer now has an opportunity to add significant value through the renovation of the 53 remaining units yet to be updated, by bringing rents to market prices, and by securing entitlements for a future rooftop deck that would provide panoramic views of the Hollywood Sign, Griffith Park and downtown Los Angeles,” Wallace said. “There’s also an opportunity to add units on the site since the property benefits from being an urban infill location near a major mass transit hub.”
According to most research studies, including The Reis Report, Hollywood’s multifamily market continues to post some of the highest median multifamily occupancy rates in Los Angeles County and the nation at 96.4%, a level that has held steady for five years. Rental rates are also climbing as record demand has helped boost asking rents throughout the region by 8.6% percent over the past three years and are expected to continue their upward movement at the highest rate yet seen in Los Angeles over the next five years, the report noted.
“Several hundred projects—both proposed and under construction—are in the works where the city and private investors have together poured time, energy and billions of dollars into efforts to revitalize key neighborhoods,” said Wallace. “From Hollywood to Koreatown to downtown Los Angeles, more than 100 multifamily and office properties are already under construction or renovation, while at least 200 more have been proposed.”
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