(Save the date: RealShare Apartments comes to the Westin Bonaventure, Los Angeles, October 24.)
LOS ANGELES-Astani Enterprises has sold a three-acre, 130,000-square-foot parcel downtown for $63 million to a buyer recorded on the deed of sale as CPIVG8 LLC. The sale price was approximately $500 per square foot, which is a record amount for a land sale of its size in downtown.
The site, which is currently being used as a parking lot, comprises almost an entire city block between Seventh and Eighth streets and between Grand and Olive (with the exception of Brockman Lofts). As part of the sale, the buyer will receive Astani’s entitlements and designs to construct what will eventually become a 700-unit steel and glass, Type 1 low-rise apartment building with a rooftop pool. The complex will include almost an acre of open space, plus high-end amenities including a screening room, lounge and spa for its 1,000 occupants, and 36,000 square feet of retail space—large enough for a national grocery store. Astani founder and chairman Sonny Astani tells GlobeSt.com that construction costs for the entitled properties will be $180 million and that the valuation of the project upon completion will be $300 million.
For Astani, who is known for developing multi-million-dollar apartment structures from downtown L.A. to the West Side, the record price is an indicator of the suddenly booming value of land in this submarket. “This deal is a testament to the strength of downtown real estate, which is interesting in light of the economy being still in a recession,” said Astani in a prepared statement. “The low interest rates have created a unique opportunity for me to sell. In my business, you sometimes take the money off the table.”
Developers have been eying the land at Eighth and Grand, which is a short walk north to thousands of downtown offices and south to LA Live and Staples Center, for years. It was originally entitled to a Japanese company, All Nippon Airlines, for 2 million square feet of office space that would resemble Rockefeller Center in New York. In 2005, Astani purchased the land and obtained new entitlements for a mixed-use, 900-unit condo project. As the condo market in L.A. has severely softened, Astani pivoted the plans to rental units before his record sale.
“I’ve been land-banking during the recent downturn, and it made sense to accept this offer because I can use the profit to develop the other numerous projects I have in the pipeline,” Astani added.
As GlobeSt.com previously reported, in December 2010 Astani sold the 66-unit Smeralda apartment complex in Koreatown to Don Sterling for $11.5 million, according to Marcus & Millichap brokers who negotiated the deal. Ron Harris of the Los Angeles office of Marcus & Millichap, who brokered the sale along with Joseph Smolen of the same office, told GlobeSt.com at the time that the complex attracted 17 offers and “would have sold for significantly more except for the fact that the buyer had to assume existing financing which was unfavorable.”
Also as GlobeSt.com previously reported, in December 2007 USC alumnus Astani gave $17 million to USC to name the civil and environmental engineering department at the university, where he earned a masters degree in industrial and systems engineering in 1978. The university said at the time that the gift was the largest ever to name such a department at USC’s Viterbi School of Engineering since it began its $300-million fund-raising initiative in 2001.
And in October 2007, Astani signed a disposition and development agreement with the City of Inglewood for a 50,000-square-foot retail center called Market Plaza Shopping Center on a 3.1-acre site at the southeast corner of La Brea Blvd. and Florence Ave. Inglewood awarded the disposition and development agreement to Astani almost four years after the city first issued its request for proposals for the site.