LOS ANGELES—A local investor has purchased a 36-unit apartment building in the MacArthur Park area of Downtown Los Angeles with plans to convert the building into a mixed-use complex by adding retail space. Closing in an incredible 17 days, the transaction illustrates the high demand for mixed-use conversion properties in the downtown market.
Because this is a distressed asset, it presented a series of challenges. Sperry Van Ness Rich Investment Real Estate Partners‘ Shiva Monify, who represented both the buyer and the seller in the transaction, had to resolve $2 million in existing debt on the property. Additionally, the property had excessive code violations from the City of Los Angeles that had to be resolved before the sale of the property. Despite all of these hurdles, the Monify was able to close the transaction in less than a month.
Located at 800 S. Burlington Ave. in Los Angeles, the property is in a high-demand area where 1,600 units are currently under construction just blocks away. The buyer purchased the property for $3.4 million, buy plans to invest significant capital to reposition the asset and add retail space. Currently, the building is 90% occupied.
Although South Park and Broadway have been the central hubs of the downtown revitalization, development is spreading to other neighborhoods as well. The arts district has also been a popular site for developers and investors, particularly for creative office. Recently, the Coca-Cola building sold to a developer who plans to build creative office in the former warehouse, and ASB Real Estate Investments recently purchased five warehouses nearby with plans to convert them into creative office space, a total investment of $62 million.