Weingarten Snaps Up 171KSF Shopping Center on L.A.'s Sunset Strip for $99M
- Jul 03, 2012
It’s been a busy year for Weingarten Realty Investors, and the second quarter was no exception. Weingarten recently wrapped up the $99 million acquisition of a star property: the 171,400-square-foot grocery-anchored retail asset at 8000 Sunset Blvd., in Los Angeles.
The building at 8000 Sunset has been holding court on a prominent corner in the city’s bustling West Hollywood submarket since its completion in 1993. In 2008, it emerged from a $9 million makeover at the hands of its previous owner, a joint venture sponsored by Transwestern Investment Company L.L.C., which had owned the property since 2006.
Today, 8000 Sunset boasts a multiple-anchor tenant roster that includes Trader Joe’s, CB2, Sundance Cinema and Crunch Fitness, and it is 94 percent leased. It’s a figure that outshines the greater Los Angeles retail market, which had an average vacancy rate of 17.8 percent in the first quarter, according to a report by Cushman & Wakefield Inc.
But the retail center has more to offer than popular stores and shops. The property also features one of the most coveted offerings in the car-centric City of Los Angeles. Parking. Visitors will find over 1,000 parking spaces in 8000 Sunset’s five-level, underground garage.
The property is a retail destination that meets all the criteria on Weingarten’s current shopping list: It is well leased; it is in an infill location with high barriers to entry; and it is surrounded by affluent shoppers who like to shop. Additionally, it certainly does not hurt that prices for retail space in West Hollywood are on the rise, with overall asking rates having jumped 10 percent in the first quarter, according to the Cushman & Wakefield report.
Transactions such as the 8000 Sunset purchase are a major component of Weingarten’s current strategy which is, as Andrew M. Alexander, CEO, said during the first quarter conference call in May, “continuing the improvement in the quality of our portfolio through recycling of capital by selling noncore properties and acquiring or developing assets in high barrier entry markets with strong growth prospects.”
Weingarten has been buying core assets, and selling noncore assets. The popular West Hollywood shopping center marks Weingarten’s third purchase of the year, bringing the company’s total acquisitions for 2012 up to $121 million so far. As for dispositions, Weingarten unloaded its 52-property industrial portfolio totaling 9.6 million square feet for $382.4 million in May. The company also sold five retail properties during the first quarter.
And the recycling program is hardly complete for the year. “We’re targeting dispositions of retail assets of $150 million to $250 million for all of 2012,” Alexander said. “By pruning our lower-tier assets, we will provide greater clarity as to the true quality of the vast majority of our portfolio.”