In Hollywood, Multifamily Trails Office

LOS ANGELES—LaTerra Development and Gemdale USA have entered into a joint venture to develop a multifamily and office mixed-use complex in Hollywood. The joint venture purchased a vacant office building at 1350 North Western Avenue in Hollywood for $51.2 million. The project will cost an additional $125 million, and is scheduled for completion in 2018.

“Hollywood continues to demonstrate tremendous demand for more residential units as the merger of tech and entertainment have created many new jobs in the immediate area,” Curtis Palmer, a broker at CBRE, tells GlobeSt.com. “With the upcoming delivery of Kilroy's Columbia Square, Hollywood will add Fender and Viacom to the list of companies who employ a great number of millennials in the submarket. Today's demand for apartment units is being driven by this cohort of renters, further demonstrating the synergies between office and residential.” Palmer represented the seller in the transaction along with his colleague Anthony Muhlstein.

The sales team marketed the property as a 200-plus multifamily development opportunity and as a redevelopment project of the 68,000-square-foot office property. They ended up with six offers from private equity and development firms. The buyers plan to exercise both options, adding on a 254-unit multifamily development and re-tenanting the existing building. “There is a terrific synergy between office and residential since nothing is more convenient than having the opportunity to walk to your office,” says Palmer. “The intent is to re-tenant the existing office building and create a new garage for the office tenant recognizing the strength of Hollywood's office market.” The residential project will feature 21 low-income housing and a parking structure.

There are several office properties under construction in the market, which is beginning to drive the multifamily sector, as employees are looking for quality homes. This is in opposition to many other nearby neighborhoods, like Downtown Los Angeles, where the multifamily market has been the catalyst for growth.

Multifamily leaders from across the country will gather in Downtown Los Angeles next week to delve into this issue even further at RealShare Apatments. The evolving Los Angeles multifamily market, which is seeing more and more mixed-use complexes with office and retail components, will be a hot topic during the full-day event with panels on national and regional topics. To hear the discussion, visit us on October 22 in Downtown Los Angeles.