How can you fetch a higher price for an industrial building? Sell it as a future self-storage facility. That’s the solution Managing Principal Peter Steigleder and partner Kelly Betpolice of Hudson Commercial Partners Inc. in Studio City provided for a client who owned an industrial building and wanted to sell it for more than its target market was going to pay. Offers for the 40,000-square-foot building and 1.5-acre property at 101 E. Linden Ave. in Burbank were coming in at $5 million to $5.5 million, Steigleder said, but their client wanted $6.5 million. The pair found out from the city that a much larger self-storage facility could be built there by taking some of the parking spaces. Renovating the existing building wouldn’t have worked because the ceilings were too low, Steigleder said. To learn the market demand for new self-storage facilities, the pair talked to Public Storage in Glendale, one of the country’s top self-storage developers, and learned Burbank had only a 10 percent vacancy rate, which is “pretty hot,” Steigleder said. “If you reposition as a self-storage, you can get higher rents on self-storage units,” he said. “Burbank is hot for self-storage, not just from residents but businesses – they use self-storage facilities for anything they need to keep for a certain amount of years.” To find buyers, Steigleder and Betpolice went to a self-storage expo in Las Vegas, Nev., where they found Trojan Storage. The company agreed to buy the property and existing building for $6.5 million, Steigleder said, and are now building a 92,000-square-foot facility. It’s expected to finish in June. “Owners want to get more and more money, and the only way to drive value is to reposition it to a higher and better use,” Steigleder said, “which in this case was self-storage.” Renovating Up New owners of outdated apartment complexes used to repaint, install carpet and buy some new plants to bring the properties up to date. But the new owners of the 10-year-old Lofts at NoHo Commons in the North Hollywood Arts District are planning a major overhaul to make it stand out to renters with more choices in today’s apartment market. Sherman Oaks real estate investment and property manager MWest Holdings, along with partner KBS Strategic Opportunity REIT II in Newport Beach, bought NoHo Commons for $103 million in November. They now plan to spend $8 million to upgrade the interior units and the exterior and common areas. Karl Slovin, president of MWest Holdings, said with 292 units and four stories high, NoHo Commons was the area’s first high-density complex. Designed for the value tenant, the complex’s parking garage sits on street level below the residential units, Slovin said, and is the first thing pedestrians see when walking by – rather than the nice-looking retail stores and restaurants that the new mixed-use complexes have. “Other (newer) buildings connect with the street; here you don’t have that,” Slovin said. “That’s the opportunity we see – to engage the building with the streetscape so when folks walk out of the train station they know exactly what it is. It’s not a prison, but an apartment building they could perhaps want to live in.” The companies plan to paint the building’s exteriors and cover certain street-facing walls with large, colorful murals. The interior units, which are about 95 percent occupied, will be renovated as they become vacant to appeal to technology and media company employees, said Matthew Ellis, senior vice president at MWest Holdings. Kitchens will get new, high-lacquer cabinets, new countertops, floors, backsplashes, sinks and hardware. Bathrooms will get similar updates. Outside, the common greenspace and pool area will be redesigned to invite more activity. Small geodesic metal domes will be installed with furniture so people can gather around barbeques, fire pits and fireplaces, boccia ball courts, an outdoor kitchen island and a movie screen. The conference room will become a co-working space, Slovin said. Final Phase A new creative office campus has entered its final phase in Northridge. The Mix at Harman Campus at 8500 Balboa Blvd. is a 45-acre combination of office, retail and restaurants with a 30,000-square-foot central park and a 37,000-square-foot LA Fitness. Developed by Shubin Nadal Realty Investors of Newport Beach, designed by Irvine’s Ware Malcomb and built by Oltmans Construction Co. of Whittier, the first two phases involved a 200,000-square-foot redeveloped creative office building. Currently, two retail and restaurant structures totaling 17,000 square feet with a center courtyard are under construction. The campus is expected to reach completion later this year. Staff Reporter Carol Lawrence can be reached at (818) 316-3123 or [email protected].
