LOS ANGELES—A joint venture between Sunrise Real Estate Group, Robhana Group and 4M Investment Corp. has acquired a class-A office building on Wilshire Boulevard from TPMC Realty Corp. for $39 million in an off-market transaction. This is the second acquisition by Sunrise in that market this year as it is beginning to shift its asset base from the San Fernando Valley to the Westside.
According to Ali Bararsani, a managing director at Newmark Grubb Knight Frank who represented the buyers in the transaction, the area is trending up. He explains that increased demand in Brentwood and West Los Angeles markets is the catalyst for improvement in the L.A. office market. Office rents in the market are 7.9% higher than they were last year for class-A properties. NGKF also reports that the overall vacancy rate on the Westside is only 2.4% below the vacancy rate for the whole L.A. market, which the firm believes is the driver of the rental increases.
Located at 12301 Wilshire Blvd., the office building acquired by the joint venture is 107,000 square feet with six stories. It was recently renovated to the tune of $5.5 million by Gensler. The improvements included a new ground-floor exterior and renovated restrooms, lobby, common areas and elevators. The property has 75% occupancy with a tenant mix that includes Open Road Films, Opus Bankand dentist and dermatologist offices. IDB Bank, Barak Volner and Rachel H. Magner served as lenders and secured financing for the acquisition.
The recently reported Riot Games lease is another example of the increase in Westside office leases. Riot Games leased 77,000 square feet of office space at Kilroy Realty‘s Westside Media Center. The lease is the second that Riot Games has signed in under six months. The first was for 284,000 square feet at Hudson Pacific Properties‘ Element LA Campus.