Creative Office Prices Begin to Soar

LOS ANGELES—The Souferian Group has sold its newly renovated creative office property in the 3^rd Street District to Continental Development for $19.6 million. The sales price of  the 35,270-square-foot building equates to $556 per square foot, a near record price for the market.

“The business plan was to buy, reposition and sell the asset, but this was also good timing in the market,” Behzad Souferian, founder and CEO of the Souferian Group, tells GlobeSt.com. “There is minimal supply in this location and if you couple that with the type of product that we delivered, it created a perfect storm, if you will, from a timing standpoint. In the last couple of years, there has been a lot more demand switching from residential products into commercial products, specifically into office, and we have seen lifestyle driven office product is in higher demand.”

The investor spent 18 months repositioning the five-story building into class-A creative office property. Located at 8075 W. 3rd St., the property features a 20-foot gloss steel entrance and a collaborative courtyard. “We strive to bring a new thought process to the lifestyle space. While we were repositioning the asset, we started to change the tenant base as well,” Souferian says. “They were lifestyle oriented and more creative in whatever industry they are in. There is a blurred line now in how much you work from home and how much you work in your office, so we really wanted to have a lot of the comforts of your own home in the work environment.”

Bob Safai, Matt Case and Brad Schlaak of Madison Partners marketed and sold the property on behalf of the Souferian Group. They brought the property to market without a price to let the market determine the value, and in a “very short period of time,” they received 10 offers from potential buyers. Souferian credits this not only to the quality of the asset and the peak market timing, but also to the innovative marketing campaign. “We delivered a product that, I think, resonated with a variety of buyers. The marketing campaign reflected the product that we delivered,” he says. “We wanted to break the mode of the typical office building, which is often anti-social. Our marketing campaign was very detail oriented and reflected the building.” The property was 100% occupied at the time of the sale. 

The Souferian Group was founded in 2012, and already has a handful of impressive projects underway. Earlier this year, it teamed up with sbe and Camden Property Trust to develop the Camden Hollywood, a mixed-use multifamily and retail complex in Hollywood. The property will open in 2016.