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Thursday, Mar 28, 2024

Four Bidders Emerge for Troubled Sun Valley Property

Four bidders have tossed their hats into the ring for the 33-acre industrial site in Sun Valley that was once part of the Branford landfill. According to the attorney for the current landowner, which is selling the property as part of a bankruptcy proceeding, TCC Fund Property Acquisitions Inc., an affiliate of Trammel Crow Co.; LNR Property Corp. Inc.; Revita Development LLC and OMP Branford LLC, an affiliate of Overton Moore Properties have all submitted bids for the property. The bids range from $18.5 million to $19.1 million. In a hearing late last week, the TCC bid of $18,750,000, was selected as the stalking horse. Although a stalking horse bid in a bankruptcy proceeding sets a benchmark price, it does not guarantee that the price the property fetches will be above or even at that level. Many other factors play a role including the contingencies that buyers place on their bids. The property, a brownfield site which many say is problematic from a development point of view, has languished for years. “There are environment, civil engineering, site design and architecture issues,” said John DeGrinis, a broker with Colliers International who, prior to the bankruptcy proceeding, had represented companies interested in acquiring the property. “All of these things are cost items that are going to have an impact on people’s perception of value.” Early in the decade, original plans to develop more than 500,000 square feet of industrial property at the site, at Branford St. and San Fernando Road, were stymied when environmental reports turned up unexpected construction issues. The original manager of the property was eventually removed and a turnaround management group was brought in to reassess the property and recruit a new management team. That new team, Branford Partners LLC, began work in 2004 to create a new development plan, but early this year, Branford Partners filed bankruptcy in order to forestall foreclosure and allow the property to be sold. “The opening bids are each in an amount more than adequate to pay the secured debt encumbering the property and, in addition, would allow for an opportunity for payment to unsecured creditors of Branford Partners,” said David S. Kupetz, a partner at SulmeyerKupetz who is representing Branford Partners. The first deed holder on the property, California Environmental Redevelopment Fund LLC, is owed about $5.7 million. An auction is scheduled to take place May 29 at bankruptcy court in Woodland Hills. Residential Venture Formed A joint venture that includes an affiliate of Larwin Co. has formed a $50 million fund to purchase, entitle and develop properties in the Western U.S. IHP Capital Partners and Larwin affiliate Laro Properties LP have formed Enterprise Land Fund headed by J. Michael Nolte, managing director. Noting that the currently weak residential real estate market may provide opportunities for purchase, officials of Enterprise said they would anticipate bringing properties to market in the next five to seven years. “We view the current slowdown in residential real estate sales as providing a particularly opportune time to be purchasing well-located, unimproved land for residential development,” Nolte said. The fund, currently operating out of Larwin’s Encino headquarters, expects to relocate its headquarters offices to Santa Barbara. IHP, which specializes in providing equity financing for real estate development, works with some of the largest institutional investors including California Public Employees’ Retirement System. Multifamily Sale The Marquis, a 32-unit apartment complex in Encino, has been sold for $6,630,000 after the owners received bids from 15 investors. The property, at 17440 Burbank Blvd., was built in 1970 and includes a pool and clubhouse. Dean Zander, a broker with Hendricks & Partners, represented the seller, The Merage Family Trust, and the buyer, MacCulloch Partners LP. Condo Conversion Another condo conversion is on tap. A private investor has acquired a 16-unit multifamily complex in Studio City for $4,950,000. The property, at 4560 Coldwater Canyon Blvd. consists of 1,000 square foot, 2-bedroom, 2-bath units. Warren Berzack, a broker with Investment Real Estate Associates, represented the seller, 4560 Coldwater Canyon LLC. Wixon Stevens, a broker with Commercial Resource, represented the buyer. Northridge Sale A property that houses the Northridge Post Office was sold to an investor for $5 million. The property consists of the 12,476-square-foot building and almost 81,000 square feet of land at 9543-9546 Reseda Blvd. Michael Schiff, a broker with NAI Capital, represented the seller Seaside Investments L.P., and the buyer, Gortikov Enterprises Inc. Senior reporter Shelly Garcia can be reached at (818) 316-3123 or by e-mail at [email protected].

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