Introduction:

• The property was purchased in June 2019 for $3,150,000, or $602 psf in an off-market transaction identified by JS.

• Average lease rate at purchase was $3.30 psf.

• With one exception, all leases were modified gross.

• One of the ground floor units was configured with no frontage to Sunset Blvd.

• The building lacked any retail synergy based on tenant mix.

  Challenge: 

• Covid 19 hit 6 months after the building was purchased.

• The building was over 100 years old with outdated infrastructure.

• 40% of the NOI was derived from second floor creative office space.

• Limited parking.

• Not located on the hard corner.

  Result:

• The building sold in August 2024 for $4,025,000 or $803 per square foot, representing a 33% increase of the purchase price.

• Average rent at sale was $4.54 psf (38% increase) with all tenants paying their pro-rata share of (NNN) expenses.

• The tandem ground floor units (including one with no street access) were combined and leased to one tenant to maximize income.

• The 2,200 sf second floor office space was leased above market at $3.00 psf plus NNN expenses.

• Upon the sale, the building was 100% leased and stabilized.

• JS sold the building in an off-market transaction to a 1031 exchange buyer.