Los Angeles Real Estate Maintains Buzz
By Alex Girda
With the sale of the Mondrian Los Angeles hotel to Pebblebrook Hotel Trust now closed, the Los Angeles real estate investment market continues to move forward, most recently with Phoenix Realty Group’s purchase of three apartment properties in San Bernandino and Highland. The total value of the transaction was $21.5 million for the once foreclosed-upon properties.
The 432 apartment units were bought from an affiliate of Fannie Mae, according to a statement from the Los Angeles-based real estate firm. Occupancy for the properties is at 95 percent, up from the less than 80 percent they measured before the Fannie Mae affiliate took over management.
Meanwhile, Los Angeles-based Jacobs Engineering Group has taken on the $122 million renovation of the Federal Building at 50 United Nations Plaza in San Francisco. Jacobs Engineering Group will handle the 75-year-old building that hasn’t had a thorough renovation since its completion. As it is a government building, the landmark deal will be an “indefinite quantity/indefinite delivery” deal according to Jacobs Engineering Group. The current one-year deal includes four one-year options to extend the agreement.
The $137 million deal doesn’t mean the hotel will be re-branded, as a 20-year management agreement has been sealed that means the facility will operate under the same brand. The managing company, New York-based Morgans, has already stated that it has used a part of the proceeds to retire an outstanding $103.5 million mortgage debt it had on Mondrian Los Angeles.
Los Angeles real estate has had quite a couple of positive signs from the office segment, while other sections have underperformed. News this week includes reports about the hotel industry, especially the well known business-lunch locale—Saddleback Inn. The city called the four buildings under the Inn’s ownership at East First and Lyon streets a threat to public safety and has issued a 60 day deadline to demolish the site. The owner, Saddleback Inn LLC, and the landlord, the Santa Ana Elks Lodge, have 10 days to respond to the order.