Real Estate Investment Firm Buys Property It Once Sold

Los Angeles-based Younan Properties Inc. seems to be pursuing some sort of recycling investment strategy these days, at least in regards to the property located at 5959 Topanga Canyon Blvd. in Woodland Hills. The real estate investment and asset management firm bought the three-story office building in 2004, sold it less than 12 months later to Value Home Loan, and purchased it again in the past couple of weeks. The 62,000 square foot Class A office building, known as WarnerView Corporate Center, was built in 1981 and is 93 percent leased to what the company said is a “desirable roster of professional tenants.” More than $1.5 million was spent replacing the HVAC system, installing a new roof and making upgrades to the elevator and common areas. “Although it is unusual for us to re-acquire a property we previously owned, this is an exceptional opportunity to acquire a property at a price well below the true market value,” said Zaya S. Younan in a press release. “The significant expansion in the cap rate does not correlate to the deteriorating fundamentals, but more relates to the anxiety, fear and oversold market,” he added. Younan represented itself in the transaction. Jeff Albee and Jeff Gould of the Calabasas office of Sperry Van Ness Real Estate Services Inc. were listing agents on the deal. Gould said the deal went down for $11.9 million with a cap rate of 8.5 percent. And the existing financing (an approximately $9.4 million loan with five years left on the note and interest rate of 5.75 percent) was key to the sale. “Without the existing financing it would have been harder to sell the property,” said Jeff Gould. “I think it’s one of the few transactions that tells the investment community and landlord community where cap rates are at these days. It sets the bar and is a good comp for Class A assets.” Paying for Prestige I normally don’t report on real estate transactions by Valley firms that deal with non-Valley properties. But the sale of the Hugo Boss building on N. Rodeo Drive. in Beverly Hills goes to show people are still willing to pay a premium for one thing: prestige. National Equity Advisors represented seller, Spanish figurine company Lladro, for the 11,333 square foot building located at 414 N. Rodeo Drive. David Feldman of Marcus & Millichap Real Estate Investment Services represented the buyer, Allied Golden, an investor from Hong Kong, The property, which was built in 1997 and occupied by Boss since then, sold for $28 million cash. Since it has only 9,638 square feet of net rentable space, the transaction closed for nearly $3,000 per square foot on a net rentable basis. The deal represents the highest price per square foot closing since the sale of the Max Mara building in 2007, according to listing agent Orbell Ovaness of National Equity Advisors. Having a presence on Rodeo Drive is an advertising scheme for many retailers, said Ovaness. That’s why property owners are able to achieve such extraordinary prices per square foot for the sale of their buildings. More M&M Deals Marcus & Millichap Real Estate Investment Services also recently completed a sale/leaseback of a 20,800 square foot Pep Boys Auto building in San Fernando. The sales price was $3.9 million, and details were not provided for the new single tenant lease. Lior Regenstreif of M&M’s Encino office, and a director in the firm’s national retail group, had the exclusive listing to market the property on behalf of the seller, Corporate Pep Boys. Regenstreif also represented the buyer, a limited liability company. And M&M sold an 18,477 square foot mixed use property located at 1200-1216 Glendale Ave./306 East Palmer Ave. in Glendale. The sales price was $4.35 million. Clyde Isaacson and Daniel Meyers of the firm’s Encino office had the exclusive listing on behalf of the seller, a limited liability company. Kirk Garabedian, an investment specialist from M&M’s Long Beach office, represented the buyer, a developer. Construction Materials Looking to start a new construction project? You have at least one trend on your side. Associated Builders and Contractors report construction materials prices continue to decrease, falling 0.6 percent in July. The numbers are based on the August 18th producer price index report by the U.S. Labor Department. Construction materials prices are 8.6 percent less than a year ago. Fabricated structural metal products slipped for the 10th straight month, down 1.0 percent for July and 6.9 percent from a year ago; nonferrous wire and cable is down 0.8 percent and 16.9 percent year-over-year; asphalt, tar roofing and siding products decreased 1.6 percent from last month, but are up 23.5 percent from a year ago. Softwood lumber prices increased 6.7 percent in July but are down 10.1 percent year over year; plumbing fixtures remain unchanged for the month and are up 0.5 percent from a year ago; crude energy prices decreased 6.2 percent last month; finished energy goods prices fell 2.4 percent; and overall wholesale prices decreased 0.9 percent, following two consecutive months of increases. Economists with Associated Builders and Contractors said the numbers are perplexing. Despite growth in Asia, Europe and North America, and the implementation of stimulus packages, prices continue a downward trend. This says the global economy is still fragile. It is also a reflection of the notion that recovery is unlikely to be brisk, including in the U.S., said one economist. Staff Reporter Eric Billingsley can be reached at (818) 316-3124 or at [email protected]