Rumor has it that the office building at 501 Colorado and the Midas site are in escrow with a hotel developer. What’s astonishing is the rumored price $35MM+ price for both sites (two – 22,500 SF land parcels across the street from one another) which is at least $777/SF per land foot! We’ll see if it closes… Please see Curbed story: http://la.curbed.com/archives/2011/09/downtown_santa_monica_getting_expoready_with_hotel_explosion_1.php
Motivated seller – New Listing in Hawthorne, CA: http://www.westmac.com/eblasts/hawthorne_13901.htm
New Listing: Trophy West Hollywood Retail Investment: http://www.westmac.com/eblasts/melrose_8448.htm
The stock market tumbled with the Dow giving up 512 points today or 4.31% of its value (Nasdaq 5.08%), the worst since December of 2008. The upside to this, interest rates also came down. Now is probably a good time to refinance your house especially if your loan amount is below $729,750. I got a quotation today of 4.00% fixed for 30 years with ARMs as low as 2.5%.
With news like today, we may have a movement of cash out of equities into more tangible assets like real estate. Some areas have been wrecked by this recession while others have held their values at nearly 2007/2008 pricing and fetching very low yields. Recent sales that support this include, a Trader Joe’s in Manhattan Beach at 1821 Manhattan Beach Blvd. which recently sold at a 5% cap rate, a New Balance store at 26th and Wilshire in Santa Monica had multiple offers and sold around a 4% cap rate in May and a long term leased El Pollo Loco on Vernon and Crenshaw in Los Angeles that sold at a 5.49% cap rate in February of 2011.
This is a good article published on July 17, 2011 and written by Roger Vincent at the L.A. Times about apartments. http://www.latimes.com/business/la-fi-commre-quarterly-apartments-20110717,0,6536545.story The highlights (Cliff’s notes version) are as follows: 1. Apartments are favored class for commercial real estate buyers and builders. 2. Most active construction is likely an apartment building. 3. The sluggish economy has put homeownership out of favor thereby making apartments a more desirable abode for many. 4. Average rents in L.A. and Orange Counties is more than $1,500 per month with expcted 4% per year increases. 5. Very little influx of new renters from foreclosed homes (interesting?)
The midyear market reports are here!
2Q Office Report: www.westmac.com/files/CoStar_Office_2ndQ_2011_Los_Angeles.pdf
2Q Retail Report: www.westmac.com/files/CoStar_Retail_2ndQ_2011_Los_Angeles.pdf
If you read this week’s Los Angeles Business Journal (LABJ), you will note the “Real Estate Quarterly” focuses on a bright spot within our local economy, technology, and it positive impact on commercial office space. It’s nice to have some good news! Santa Monica has been compared to Silcon Valley with the influx and growth within the tech sector. Recent large leases include Riot Games (2400 Broadway) for 88,000 SF, eHarmony (2400 Broadway) for 60,000 SF, Hooky Interactive (2415 Michigan) for 10,500, Beachmint for 14,000 SF (1411 5th Street) and Google in Venice for 100,000 SF (340 Main). Additionally, the area is home to Yahoo, Demand Media, Edmunds.com, Cornerstone OnDemand, Vevo and Activision Blizzard. Of all the office space submarkets tracked in greater Los Angelesin this week’s LABJ, Santa Monica has the only single digit vacancy of 9.6% compared to the average vacancy rate across all of L.A. at 16.5%. Perhaps Santa Monica has finally ditched its nickname “People’s Republic of Santa Monica” for it’s new nickname, “Silicon Beach”.
This is an excellent opportunity for an investor or user seeking a property in Santa Monica, CA. $3,950,000 ($289/SF building; $206/SF land). Please go to link: http://www.westmac.com/eblasts/smb_2901.htm
Please see new sale listing in Hawthorne: http://www.westmac.com/eblasts/hawthorne_12852.htm