WEST HOLLYWOOD, CA-Broadreach Capital Partners of Palo Alto has acquired the Sunset Millennium office and retail complex on the Sunset Strip from New York's Apollo Real Estate Advisors for $100 million. The deal includes the 78,000-sf, 10-story former Playboy office building and an adjacent 106,000-sf retail and restaurant complex, with Apollo retaining ownership to adjacent property where it plans further development.

David Simon, Los Angeles-based managing director with Broadreach, says that the company plans "extensive improvements" to the plaza area of the complex. Broadreach has immediate plans to convert 22,000 sf on the top floor of one of the projects' two retail buildings into additional office space, according to Simon, who notes that "Quality office space in this submarket is extremely tight and we see rents continuing to improve for some time."

Simon says that Broadreach will add a variety of customer services, such as valet parking, to make the project attractive to trendy restaurants and high-end retail. H&M, a high-fashion retailer, has already signed a lease for its new Los Angeles signature store.

The former Playboy building, built in 1963 and renovated in 2001, is 100% occupied, predominantly by entertainment industry companies. The two-story retail buildings, which surround a single-story "crystal pavilion," are 88% leased and are anchored by Equinox Fitness Center, Madison Shoes, H&M Clothier and the Ketchup restaurant. The project includes a subterranean garage totaling 1,200 parking spaces.

Apollo's plans for the adjacent property include the development of two new hotels and 191 condominiums. Simon says that with the additional development the Sunset Millennium project "will become a premier destination" on the Sunset Strip.

The Sunset Millennium is the second major Broadreach office acquisition in the area in the past six months. The firm recently purchased the CNN Building at 6430 Sunset Blvd. in Hollywood and subsequently struck a long-term deal with CNN to remain in its space. Apollo was represented in the Sunset Millennium sale by the Cushman & Wakefield team of David Hasbrouck, Richard Plummer and Steve Algermissen, with Broadreach representing itself.