LOS ANGELES—The sales team of an office building with “friendly zoning” marketed the site for redevelopment into multifamily—and competition soared.
Originally posted by KELSI MAREE BORLAND
Developer Jamison has acquired an older office building from an entity advised by Cohen Asset Management for $20 million. In an earlier story, GlobeSt.com reported that the buyer hired Wilshire Construction as the lead contractor to convert the office building into multifamily housing. The seller’s team marketed the property as a redevelopment site, noting that the property had “friendly zoning” and multifamily would be the highest and best use.
“The property is under-developed with friendly zoning for a high-density multi-housing project, which was the highest-and –best use for the site,” Blake A. Rogers, a director at HFF, tells GlobeSt.com. “The seller recognized the appetite in the market for multi-housing development sites in the submarket and especially along Wilshire Boulevard. Further, given the term remaining on the current lease, the Seller realized that he could capitalize on this demand while providing a developer with cash flow to carry through entitlements.” Rogers represented the seller in the transaction, along with director Andrew Harper.
The redevelopment-focused marketing campaign worked, resulting in a competitive bidding process. “We fully exposed the property and had a very competitive process. Bidders for the property ranged from local family offices, to house hold institutional developers and everything in between,” adds Rogers, who did not disclose the number of bids.
There is incredible demand for multifamily housing in Los Angeles, with Mayor Eric Garcetti pushing for an additional 100,000 unit to go up in Los Angeles by 2021. “This sale, along with several other significant multi-housing projects in close proximity to 2601 Wilshire are real time indications that developers and capital believe that the desirability and rent growth seen over the past several years in core Koreatown and DTLA will continue to creep east and west respectively,” says Rogers. “There is a tremendous opportunity to capitalize on the upside in neighborhoods like this one that have not yet seen the development boom that core Koreatown and DTLA have.”
The four-story 62,000-square-foot property is fully leased to the County of Los Angeles trough 2019. Then, Jamison plans to develop the property into a 248-unit apartment complex. The property also has a five-level parking garage.
This article was original posted by GlobeSt.com and can be found HERE.
