Senior Vice Presidents Dan Bacani and Dave Maron with NAI Capital’s Pasadena office negotiated the sale of a 15,114 square foot office building in Eagle Rock, a neighborhood of Northeast Los Angeles County. The transaction totaled $4,200,000 or $277.89 per square foot. Bacani and Maron represented the seller, Khaled Tawansy, M.D., Inc. The buyer was Paka Propertiers, LLC.
The office building is located at 7462 North Figueroa Street. It was designed by architect Harlan Pedersen. The two-story building was built in 1966 and completely remodeled in 2009 to accentuate its mid-century modern post and beam design. The property sits on approximately 19,730 square feet of land in a serene campus setting. With proximity to the 134 Freeway, it is in a central location to Pasadena, Downtown Los Angeles, Glendale and Burbank. The property was 100% occupied at the time of the sale.
Bacani said, “A key to our success in selling this asset for the seller was not only thoroughly understanding the unique Southern California Edison easement and the other idiosyncrasies associated with the property, but our ability to interface with a number of principal advisors including attorneys, CPA’s and title officers for close to a year.”
“The property offered the new owner a unique opportunity to acquire a newly renovated, creatively designed, multi-tenant investment with stable cash flow,” added Maron.
Vice President Kevin Kawaoka with NAI Capital completed the sale of a 9-unit apartment complex located at 3321 Keystone Ave, Los Angeles, Calif. Kawaoka obtained the exclusive listing and represented the seller in the transaction. The seller, Almanza Trust, sold to N&G Investments for $3,946,000 or $438,000 per unit. The sale price per square foot at $503 set a new record high on a price per square foot basis for non-rent controlled apartment buildings in the Westside’s Palms community of Los Angeles.
The Keystone Manor is a two story 7,850 square foot project built in 1988, with a unit mix consisting of both one and two bedroom apartment homes. The property is situated in a prime Palms area located just South of Rose and East of Overland Avenue. At the time of the sale the building was 100% occupied. The vacancy in Palms for apartment units of similar size is extremely low due to rental market demand, which has contributed to escalating rents and outstanding sales prices.
Kawaoka said, “The seller had this property in their portfolio over 10 years. Current market conditions made it the perfect time to sell and our thoughtful and effective marketing plan for this property produced multiple offers over asking price. We were able secure a buyer $100,000 above asking price, negotiate favorable terms and maximize the value for the Almanza Trust. Palms is one of the most desirable areas due to its proximity to the metro rail, Downtown Culver City and Silicon Beach. Rental units will remain in demand there. The non-rent controlled property offers a tremendous long-term hold potential for the new owner.”
NAI Capital negotiated the purchase of a 10,156 square foot gym in Pasadena, Calif. Senior Vice President Glenn Melnick with NAI Capital’s Pasadena office represented the buyer, North Lake Partners, LLC. The seller was Joe Abe, LLC. The transaction totaled $1,300,000 or $128 per square foot.
The property is located at 1368 N. Lake Avenue with prominent street visibility. The building is 2-stories with beautiful wood bow-truss ceilings, located just North of the 210 Freeway in a prime area of Pasadena. North Lake Partners, LLC purchased the property to relocate their antiques business to this location. The building was 100% vacant at the time of the sale. The first floor is approximately 7,250 square feet. The building’s second floor space is 2,906 square feet.
Melnick said, “We originally thought the first floor square footage was the only space legally permitted in this building. However, we discovered the second floor is also legally permitted. When you factor in the additional square footage that was discovered on the second floor, this brought the total price per square foot to $128. Looking at sales comps in the area, I doubt you will find anything else comes close to this! Plus being an owner-user made this deal a no-brainer, and cheaper than paying rent.”
Senior Vice President Robert Stover with NAI Capital represented SW College of Medical-Dental Assistants in the purchase of a 13,500 square foot office building in Van Nuys, Calif. The transaction totaled $3,265,000 or $252 per square foot. The seller was 14540 Haynes LLC.
The property located at 14540 Haynes St in the Central San Fernando Valley. The facility was purchased to be used as a dental school. The two story facility was built in 1965, renovated in 2000 & 2011 and is situated on 22,499 square feet of land. The property is in immaculate condition.
Stover said, “This property fits perfectly into my client’s expansion plans and market coverage. The uniqueness of the property and it’s accessibility to amenities and their target market made it a perfect opportunity for my client to buy.”
Bill Kiefer, Executive Managing Director, and Steve Doll, Senior Vice President, with NAI Capital’s Ventura County office represented Camdaily LLC, the seller of a Class A 37,400 square foot office building known as Camarillo Business Center VI. The $7,000,000 sale transaction in Camarillo, CA was to the Ventura County Community College District who will occupy 70% of the property for their administrative headquarters. The remaining space is generating long term income from four separate tenants, the largest being Premier America Credit Union.
The professional office property enjoys a central Ventura County location at 761 Daily Drive, Camarillo, important for servicing VCCCD constituants from all areas of the region. The two story project is one of seven office buildings that make up the Camarillo Business Center. Ventura County Community College District will be relocating from Ventura County and will utilize this building for its new headquarters.
Kiefer said, “Local investors initially acquired this property with a very quick off-market transaction in 2015. At the time, the local market had significant vacancy risk which has since tightened over the past 15 months. The more recent sale to VCCCD was another off-market transaction as Camdaily had intended to hold and lease the property for the long term. The building enjoys Ventura 101 Freeway exposure, efficient floor plates and space design suitable for VCCCD’s intended use – all making Camarillo Business Center VI an ideal headquarters for the College District’s planned administrative operations.”
Doll added, “Assets in the Ventura office market continue to see appreciation in value, making for an attractive long term investment in the region. The property acquisition made perfect sense for the College District.” The buyer was represented by Center Commercial Realty.
Vice President Emmanuel Ndu with NAI Capital’s Encino office completed the sale of an 8-unit multifamily apartment complex in Los Angeles, Calif. Ndu represented the buyer, Herman & Celine Culhaoglu, and seller, MCP 1618 Kenmore LLC, in the transaction.
The property is located in the highly desirable Los Feliz area at 1618 N. Kenmore Avenue. The apartment building included eight 1 bedroom-one bath units. The property was 75% vacant at close of escrow. The sale price totaled $2M or $250 per unit.
Ndu said, “The location is one of the most supply restricted high-density apartment markets in Los Angeles. The rental market in the Los Feliz sub-market is incredible with extremely low vacancy and strong rent growth, providing tremendous upside in rental income opportunity for my client. My client will rehab the property extensively, lease up the vacant units and keep as a long term hold.”
To the general public, commercial real estate and entrepreneurship are virtually synonymous. But while the generally held image is that of a large, successful development or brokerage ﬁrm, as SIORs know, it takes a wide variety of forms in commercial real estate – not only in terms of the services performed or strategies employed, but in the size of the company, and even in what the individual perceives to be entrepreneurship.
One thing is clear, however: SIORs agree that their ﬁeld will remain fertile for entrepreneurs, even in the face of large conglomerates that would seem to be made for the discouragement of individualism. Still, the most “pessimistic” prediction, which came from Jerry Fiume, SIOR, CCIM, senior account executive, NAI Cummins Real Estate in Akron, Ohio, was far from bleak. “It would be hard for our group to be in a ‘corporate setting’ given the ﬂexibility and nimbleness with which we operate,” he says. Still, he predicts a “positive trend” overall.
Visions Can Vary
While there is common optimism about the future of entrepreneurism, many SIORs have diﬀering visions about exactly what it is, and why commercial real estate is such a fertile ground for its growth. “To me it is really about individualism,” says R. Scott Martin, SIOR, executive vice president of NAI Capital in Pasadena, Calif. “It’s about how you as an individual can take your idea and ﬂourish, make it contagious, so people use it or see it, and build wealth from it. And most people who are entrepreneurial have a passion for self-fulﬁllment; that’s important.”
“A true entrepreneur is a visionary and risk taker who has the courage to pursue a dream, the fortitude to overcome obstacles, and the endurance to stay true to the course,” adds Tere Blanca, SIOR, president and CEO of Blanca Commercial Real Estate in Miami. “Expanding on that, entrepreneurship not only involves a spirit of adventure and resolve, but also requires the ability to lead, motivate, attract, and retain creative new talent that shares the company’s vision and core values and the skill to prioritize, manage, and continually evolve.”
“Entrepreneurship to me is being ac-countable to make something happen,” says Fiume. “I like being responsible for a project that is in my circle of inﬂuence; being creative, diplomatic, and visionary to see what the end result of the project should look like.”
The Lure of Real Estate
What is it about commercial real estate that draws entrepreneurs? “Commercial real estate is uniquely exciting and rewarding, as ultimately you’re helping to deﬁne and shape cities,” says Blanca. “Commercial real estate connects you to the community in a real and meaningful way, aﬀording the opportunity to work on signiﬁcant projects and impact community dynamics.”
She adds that the entrepreneurial spirit also is attracted to the “adrenaline-generating” nature of commercial real estate: the fast pace, high-level strategizing, and critical negotiations. “Every day brings new engagements, new opportunities, new learning, and new platforms to help others succeed,” says Blanca. “Add to that the fact that in our CRE services industry we’re mostly compensated on contingency, and you have a competitive entrepreneur’s dream!”
“There is freedom in our industry — as much as you can win, you can actually lose, so that keeps people true to themselves,” adds Martin, “But the ultimate thing is the ability to generate wealth – from the true sense in a business perspective. You can amass nice money on a year-to-year basis, but true wealth is earned by the practice of what many SIORs do.”
What Martin is referring to is getting into your own deals as well as helping clients. “Maybe only two, three, or four people in each brokerage house do that, but I bet 100 percent of those would be SIORs,” he asserts. “That’s part of the camaraderie of the group. Last week we were looking at a deal in South Carolina; I knew little about the area, so I sent it to Bill Burgess, SIOR, CCIM, and he said ‘Let’s buy this thing together.’”
“I came from a commercial development background prior to entering the brokerage arena,” Fiume shares. “My background gives me the experience to be creative to get deals done, as compared to how a traditional broker would look at deals. My background lends itself to entrepreneurial behavior.”
That Entrepreneurial Feeling
Beyond the attractiveness of the ﬁeld to entrepreneurs, SIORs note speciﬁc professional activities that personally make them feel most like an entrepreneur. “I am a pretty good idea guy; I generate an idea and try to see it to fruition,” says Martin. “In the bricks and mortar sense I identify property, see what it could be, and then identify a buyer to help create that vision.”
For Fiume, the rewards come from “Finalizing the details of a deal in a way that others aren’t aware of, or done in ways that others wouldn’t think of.”
“Commercial real estate oﬀers ongoing opportunities to think outside of the box, to ﬁnd creative solutions for our clients,” adds Blanca. “For example, I greatly enjoy taking a deep dive into our clients’ goals and objectives, helping them ﬁnd the right space that meets their unique needs while supporting their businesses in ways they never imagined possible. I thrive on making the ‘impossible’ come to pass.” Blanca says she also “loves” to recruit bright new talent, calling it “One of the entrepreneurial essentials I ﬁnd most rewarding. We look for team members who share our core values and commitment to exceptional client service, and who have a ‘can do’ attitude and are creative solution ﬁnders who don’t hesitate to forge new paths when necessary.”
Conglomerates Not a Threat?
Blanca does not see the advent of large real estate conglomerates as a threat to the growth of entrepreneurialism. “I believe they continue to be entrepreneurs, monetizing their investment, although in some cases there may be pressure to conform to the larger organization’s modus operandi,” she says.
“With Blanca Commercial Real Estate, I enjoy complete independence and the ability to remain true to my vision, serving clients with the utmost transparency and the uncompromising commitment to excellence they’ve come to expect from us.”
Some of the smaller companies that have decided to sell, she continues, may have had drivers or reasons to which others are not privy. “In some cases, it’s an exit strategy,” she oﬀers. “Regardless, the decision to sell/merge is entrepreneurial in nature. Many of these professionals end up starting new ventures all over again when their contracts expire.”
“It all has to do with the culture of a company,” says Martin. “In certain company cultures they cultivate and bring in the very entrepreneurial brokers and give them a lot of freedom. But in some national companies you have a specialty, a niche, and that’s what you do, with a very laser focus through corporate culture. So, it’s not size as much as culture.”
Regardless, he remains optimistic about the future of entrepreneurialism in commercial real estate. “I have interviewed a lot of college folks,” he shares. “Ten years ago they wanted to create a new app or software and hit it big; now most have re-recognized our industry and the freedom we have, and they seem to show a willingness to work hard. They understand about building relationships, and the time and commitment it takes to start and grow an entrepreneurial business. That’s exciting, and I hope it will bode well for the future of our industry.”
Martin’s enthusiasm is also buoyed by the diverse expertise that SIORs oﬀ er. “Many of us have the vision to take land sites and see what they can be in the future, while others have the foresight to help companies streamline and become more eﬃcient; that’s what makes us unique and ﬂourish,” he oﬀers. “You can’t just read that in an article – you need a trusted advisor.”
“Although I can’t speak for other entrepreneurs, we see the emergence of technology as a signiﬁcant positive and a powerful tool to better serve clients,” says Blanca. “Technology enables us to access and analyze data in advanced new ways and to perform from leading-edge platforms. Also, in light of recent sales/mergers, there may be some talent fallout creating a pool of top-level talent looking for a better ﬁt.”
“All of the easy deals were done in the 1950’s and 60’s,” notes Fiume. “The land that is left generally speaking requires creativity to develop in this day after taking into account all of the governmental ‘police powers.’”