Blackstone Sells Creative Office Building in LA
- Feb 16, 2017
By Gail Kalinoski
Los Angeles—A five-story, Class A creative office building in the Universal City submarket of Los Angeles near many of the city’s major studios has been sold by Blackstone to 4M Investment Corp. with the help of NGKF Capital Markets.
The 103,154-square-foot building at 3330 Cahuenga Blvd. West was sold for $36 million, according to the San Fernando Valley Business Journal.
“This is an institutional asset that offers tenants creative spaces as well as a location that is near a concentration of entertainment and tech firms in the neighboring Burbank and Hollywood markets,” Kevin Shannon, president of NGKF Capital Markets, West Coast, said in a prepared statement. “The property offered the buyer the opportunity to add value by implementing a modest renovation plan and bringing rents to market rates as leases expire.”
He noted that the Class A vacancy rate in the Universal City submarket is 2.7 percent, which indicates the property will likely experience sustained tenant demand and near-term rental growth. The property is currently 98 percent leased to multiple tenants including Panasonic, EPS Cineworks, Joke Productions, Abominable Pictures and Extreme Reach Inc.
The NGKF Capital Markets team of Shannon, Senior Managing Director Rob Hannan and Managing Director Michael Moll were assisted by the local market leasing team, Rob Erickson and Trevor Belden of Industry Partners, who all represented the seller, Blackstone.
The building, which was constructed in 1988, sits on a 1.73-acre lot and has 379 parking spaces in an underground garage. It has prominent visibility from the 101 Freeway and Cahuenga Boulevard and is also near the 134 and 5 freeways. The property is located close to major studios including NBC/Universal, ABC/Disney and Warner Bros.
The property was part of a portfolio purchased by Equity Office from Morgan Stanley in December 2011, according to Yardi Matrix data. Morgan Stanley had paid $30.6 million for the building when it acquired it from Broadreach Capital Partners in May 2006. Blackstone has owned Equity Office, which currently has a nationwide Class A office portfolio of 50 million square feet, since 2007.
The NGKF Capital Markets team completed another Southern California deal recently. Last month, Shannon and colleagues Paul Jones, Blake Bokosky and Rick Stumm represented the institutional seller of 18401 Von Karman Ave., a Class A office property in the Irvine Business Complex. The five-story, 114,296-square-foot property was the third office investment transaction handled by the NGKF Capital Markets team within the Greater Airport market over the past several months.