Seller Haggles $29.5M for Swap Meet Site

The buyers were Robertson Properties Group, a Los Angeles-based real estate developer, investor and manager, and LAUSD Financing Corp., a subsidiary of the Los Angeles Unified School District that acquires property for the district on a land bank basis.

The sellers of the site at 601 Glenoaks Blvd. in the city of San Fernando were the Dunn Family and Hannon Properties LLP, both of Los Angeles. Richard Dunn in Charles Dunn's downtown Los Angeles office represented the Dunn family, with Bill Bauman and Brent Weirick of Colliers Seeley International representing both Hannon Properties LLC and Robertson Properties Group. LAUSD represented itself.

LAUSD Financing Corp. bought 16.5 acres for approximately $14.3 million, with Robertson Properties Group buying slightly more than 17.4 acres for approximately $15.1 million.

Michael Dunn, executive vice president of the Charles Dunn Co. in its Downtown LA office, tells GlobeSt.com that Robertson Properties Group has negotiated a ground lease with LAUSD Financing Corp. for the school district's portion of the land in order to retain the entire 34-acre parcel for the swap meet over the next two years.

Robertson, which focuses primarily on retail and commercial projects in California, Hawaii and the Pacific Northwest, eventually plans to develop a retail center on its portion of the site. LAUSD is still in the master planning stage for the North Valley area and has not yet determined a specific use for its site, but Michael Dunn points out that developing a school site usually takes at least two years. He says Robertson Properties' goal is to relocate the meet, probably nearby but outside the boundaries of the 34-acre parcel.

The deal was especially attractive to the LAUSD, Michael Dunn adds, because the land comes without the usual relocation issues and disputes that a district often faces when it attempts to acquire tracts occupied by apartments or commercial buildings.

The sale of the 34 acres, which went for approximately $867,000 per acre, illustrates how Southern California land values have risen, the Dunn EVP notes. In 1950, Dunn Co. founder Charles Dunn--the father of Richard Dunn and the grandfather of Michael Dunn--purchased the site with partner Fritz Burns. The duo acquired 100 acres that was the home of the San Fernando Airport for $2,500 per acre or a total of $250,000. The recent sale closed right about market value, according to Michael Dunn. He notes that his grandfather acquired his share in the property in lieu of a brokerage commission, at a time when commissions were about 10%.

The 100-acre site evolved into the 34-acre site as heirs of Fritz Burns sold off portions of the property over the years. William H. Hannon, who was a partner of Fritz Burns, purchased a portion of the property and set up the swap meet, which became one of the most profitable of its type in California. Following Hannon's death in 1999, his ownership interest went to two foundations in his name that distribute millions of dollars to local charities each year.

When Charles Dunn bought the land, the Charles Dunn Co. was already established as one of the region's prominent brokerages, having been founded in 1921. It is now one of the largest full service brokerage and property management firms on the West Coast, with brokerage, property and asset management, corporate and construction advisory as well as financial services to tenants, owners, investors and developers. The company maintains offices in Downtown Los Angeles, West Los Angeles, Seal Beach, Sacramento, San Diego, San Fernando Valley, San Francisco, Orange County and Phoenix.