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CULVER CITY, CA-A private investor bought a converted industrial building for $150 per sf, setting a record price per square foot for industrial properties that have been converted for office use, according to Klabin Co. brokers involved in the sale. “The previous high for this type of building was about $135 per square foot,” Doug Marshall of the Klabin Co. tells GlobeSt.com.

Doug Marshall and partner Ron Rader of Klabin represented the seller, a family trust that was marketing the building for lease but chose to sell after receiving the purchase offer, Marshall tells GlobeSt.com.

The 25,000-sf building is at 3655 Lenawee St., near Jefferson and La Cienega boulevards, and sold for $3.75 million. It is one of many former industrial buildings in Culver City and Santa Monica that were converted to office use in the late 1990s. Such offices were in demand then from dot-com companies, advertising agencies, architectural firms and others who eschewed traditional office space in favor of the converted industrial look.

A paradox of the high price paid for the building is that it was empty at the time of the sale. But Marshall says that illustrates what’s happening in the market. Leasing is weak, he says, but buildings for sale are in demand for a number of reasons. First, because interest rates are low and financing is readily available; second, because disenchanted stock market investors are switching to real estate; and third, because few if any other investments offer returns comparable to those of real estate.

Marshall tells GlobeSt.com the buyer of the Lenawee Street property is a doctor who plans to use the building for a medical instruments company. The space was once leased to a dot-com firm that paid for extensive tenant improvements, including earthquake retrofitting and air-conditioning throughout the building, but the company went out of business. Another reason the building was so valuable, Marshall explains, is that it has three parking spaces per 1,000 sf, a high ratio for Culver City, where many of the properties are squeezed for parking.

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