85.7 F
San Fernando
Friday, Mar 29, 2024

Prime In-fill Land Changes Hands Three Times in Five Years

Craig Stevens and John Battle, principals at Lee & Associates and members of the company’s multi-housing group, just sold a piece of real estate that might be considered “The gift that keeps on giving.” The duo, along with Jim Fisher and Mike Smith of Lee & Associates, recently transacted the purchase of eight acres of prime in-fill land located at 20600 Ventura Blvd. in Woodland Hills. This is the third time in five years the property has changed hands. “I never would have imagined when I sold this site the first time that this would still be an empty parcel of land,” said Craig Stevens in a press release. “In 2006 it seemed like we would never keep up with the apartment and condo housing demand, and this project, with its great location and elevations offering panoramic views of the Warner Center and the San Fernando Valley, promised to be among the very best of the projects in development,” he added. The Troxler Group and Lehman Bros acquired the property for $25 million in 2006. Troxler took it through the development process and completed plans to build 355 entitled condominium units with 18,000 square feet of retail. In 2007, Troxler sold the property to JPI Development for $48 million. But JPI got caught in the real estate market downturn and the property fell into default. Mike Smith said the land was considered an REO property and Bank of America the owner/seller. The property attracted numerous offers. And rumor has it a group out of Orange County locked-in the deal for between $13 million and $13.8 million. The developer plans to re-entitle the parcel, but Lee & Associates said it’s too soon to know how many units they will build. Most likely the final project will be less dense than the first project back in 2006. “The latest price reflects a new economic reality in the marketplace,” said Stevens. “With banks requiring much more equity than they did in the past, bigger projects are not always better.” Developers used to be able to obtain financing based upon rental growth trends and the strong housing demand. But today, rental growth assumptions are lower, and developers must allow for rental concessions and a longer time frame to lease up units, said Lee & Associates. Marcus & Millichap Real Estate Investment Services also recently sold an REO property in the Valley. The firm brokered the sale of 99 condominium units within the 161-unit, 57,459 square foot Sonterra Homes complex at 15425 Sherman Way in Van Nuys. The property sold for $6.15 million, or $62,121 per unit. Ron Harris, of the firm’s National Multi Housing Group in Los Angeles, represented the seller, a Chicago-based lender, and the buyer, Gidi Cohen of Cohen & Associates. “This is one of the larger broken condo deals to close in the San Fernando Valley,” said Harris. “These units were selling for as much as $310,000 each in 2007.” The property was last purchased in 2005, said Harris. The owner converted the complex into condos and proceeded to sell off dozens of the units in 2006-2007 while the market was still good. But when real estate prices crashed, so did sales of the condos. The owner foreclosed on the property in June 2009. The deal was unique in the sense that there are not many fractured condo deals happening, said Harris, and this is considered one of the larger ones in the Valley. Most are standard condo deals, and Sonterra Homes would have fetched a much higher price if it were un-fractured. The buyer paid all cash. Forty-one of the units were occupied at the time of sale. And the new owner plans on renting out the remaining units until the real estate market turns around, at which time the units will be sold. Harris expects more REO properties to hit the market. But he said it’s hard to speculate at what pace because many banks are trying to avoid foreclosing on properties by doing short sales and workouts. He has yet to sell a piece of property multiple times, unlike the real estate downturn in the late 1980s and early 1990s. Staff Reporter Eric Billingsley can be reached at (818) 316-3124 or at [email protected]

Featured Articles

Related Articles