LOS ANGELES—Amoeba Records has acquired its iconic building at 6400 Sunset Blvd. in Hollywood. The record store repurchased the 50,000-square-foot building for $13.7 million, or $275 per square foot, from an off-market sale-leaseback transaction completed in 2009. According to an industry source unrelated to the deal, properties in that area typically trade at $500 to $600 per square foot.
With few lending in 2009, Amoeba entered the sale-leaseback transaction with a private partnership after failing to refinance the property due to the economic downturn. Michael May, founder of May Realty Advisors, represented Amoeba in both the sale-leaseback transaction and the repurchase transaction. The sale-leaseback included a “right to repurchase” agreement. “This is a phenomenal piece of real estate,” May tells GlobeSt.com. “The market is there, and it was a good timing to repurchased the property.”
Amoeba currently occupies 100% of the two-story building, and, according to May, has no plans to vacate the property. It repurchased the building with no cash down, 100% financed. Richard Huelsman of May Realty Advisors arranged the loan on behalf of Amoeba.
Amoeba’s decision to repurchase illustrates the improving market fundamentals in Hollywood. Activity in the market has been picking up across sectors. Earlier this week, GlobeSt.com reported that four new tenants signed leases at the Sunset Media Center in Hollywood. The leases totaled 21,848 square feet. Kilroy Realty purchased the property last year, and, through a series of renovations, has increased rents from $2.85 per square foot to $3.90 per square foot.