Real estate brokers say they are starting to see the return of professional investors in the office and industrial market as things appear to be bottoming out. Jeff Albee, senior vice president of investment properties for Colliers International in Encino, said this particular market before had been dominated by owner-user deals, or deals in which the buyer would also occupy the purchased buildings. However, from late 2010 through early 2011, he has started to see more investor activity. “Investors believe that we’re either close to the bottom or at the bottom of the cycle, which means it’s time to go ahead and start buying investment real estate,” he said. “We’re starting to see properties transact at a higher pace and with more transactional volume.” Total investor sales in the San Fernando Valley increased by 46 percent in the fourth quarter of 2010 compared to the same period in 2009, according to Colliers International research. There were 62 investment sales totaling $195 million volume in the fourth quarter of 2010 compared to 49 investment sales totaling $134 million in volume during the same period the previous year. Albee said he has also noticed that different types of investors were starting to make purchases, from those investing for safety and cash flow with minimal management in mind to professional real estate buyers who are ready to fix up a property and take on management full-scale. One transaction that reflects the trend is Kids From The Valley VI LLC, a Los Angeles-based privately owned commercial real estate investment company, Albee said. In early January, the investor acquired three multi-tenant buildings leased at about 90 percent at 29399 Agoura Rd. in Agoura Hills in an all cash deal. The total acquired space amounted to about 40,000 square feet. While the sale price was not disclosed, industry professionals estimated a purchase price for the deal of $140 per square foot. Albee represented the seller, Agoura Oaks LP, in the deal. Ron Feder of RJ Feder & Associates represented the buyer. Jay Martinez, a principal for Lee & Associates, said he is also noticing the higher investor activity. He has been getting a much higher volume of calls on properties that are on and off the market. He even started getting cold calls again from people hired by investors to scope out properties, something he hadn’t seen much of since 2007. In October, Martinez closed a deal on an office building in Northridge that had been sitting on the market for two years. The property was a 35,000-square-foot, Class-A multi-tenant medical office building that sold for about $9.9 million. The building was fully occupied. Martinez represented the seller, Northridge Medical LLC. KW Commercial represented the buyer, 9535 Reseda Medical LLC. Martinez agreed that the idea that the market is bottoming is the thing drawing interest. “We’re really swimming along the bottom of the cycle and people don’t think there’s going to be more of a correction,” Martinez said. “(They’re) saying maybe prices will start to rise again.” Office Space Woodland Hills-based Younan Properties Inc. recently signed 48,347 square feet of new deals and renewals involving two local office buildings. In the largest transaction, American Recovery Services Inc. – or ARSI – renewed its contract for 29,822 square feet at Younan Corporate Center. The center is located at 555 St. Charles Dr. in Thousand Oaks. The building serves as ARSI’s headquarters, where it occupies about half of the building. “We were happy to renew the major tenant in our building,” said Brian Hennessey, vice president of leasing for Younan Properties’ California portfolio. “We’ve enjoyed the mutually beneficial business relationship and look forward to continued tenancy in the building. CresaPartners represented the tenant in the deal. Younan Properties also recently leased 18,525 square feet of office space at Younan Corporate Plaza at 5959 Topanga Canyon Blvd. in Woodland Hills. The Class A building is located in Warner Center and serves professional and service-based tenants such as Gilad Development, Hayden & Kassel Law Offices and LSI Title, which Hennessey identified as a new tenant. Apartments Encino-based commercial brokerage firm Marcus & Millichap Real Estate Investment Services sold a 12-unit apartment property Tujunga Canyon Apartments on behalf of the seller. The property was sold for $1.2 million. Daniel Withers, an investment specialist in Marcus & Millichap’s Encino office had the exclusive listing to market the property on behalf of the seller, a private investor. Withers also secured and represented the buyer, another private investor. The deal represents the fifth apartment property Withers has sold in Tujunga in the last two years.
