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SANTA MONICA, CA-The Tides Building, a mixed-use office, retail and residential property, has sold for nearly $587 per sf after trading for $18.6 million a year ago, according to locally based Madison Partners. The deal was one of two involving Downtown Santa Monica mixed-use buildings that have sold recently, underscoring what brokers describe as a very tight market for such space in Santa Monica.

The 36,535-sf Tides Building, at 331 Santa Monica Blvd., sold for $21.8 million in a transaction that was brokered by principal Bob Safai of Madison Partners. Donald Passman bought the building from Ten West Associates, which had acquired it a year ago in a deal that was also brokered by Madison Partners. The new buyers financed the acquisition with a conduit loan of $17.5 million that Madison Partners arranged.

Safai calls the building “ideally located,” noting that the sale closed at an in-place capitalization rate of 5%, with retail rents at 50%-60% below market. The three-story concrete and steel structure stands on the corner of Fourth Street and Santa Monica Boulevard, three blocks north of the I-10 Freeway and a block from the city’s Third Street Promenade.

The Tides Building is occupied by two retail tenants on the first floor, a spa on the second and six high-end, townhouse-style apartment units on the third story. When it traded last year, in a 1031 exchange deal, Madison Partners represented both the buyer and the seller of the building, which was completed in 2003.

In the other Downtown Santa Monica mixed-use deal, an owner-user acquired a 12,100-sf office and residential loft building at 1522-24 2nd St. from Odyssey 33 LLC for $8 million, according to Coldwell Banker Commercial Westmac. The seller was represented by T. C. Macker and Brian Peterson of Coldwell Banker Commercial Westmac, who teamed with Carol Ellis and Paul Pekar of Coldwell Banker Pacific Palisades. The buyer was represented by Ali-Dhaif of Prudential California Realty and Vivian Williams of Rodeo Realty Inc.

Macker says that the transaction underscores the strength of the Santa Monica commercial real estate market. Not only did the property sell for 99% of its listing price, but “there were multiple back-up offers,” he says.

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