Kilroy Sells 2 Hollywood High-Rises for $202M
This is the largest multifamily sale in Southern California so far this year.
Kilroy Realty has completed the $202 million sale of Columbia Square Living and Jardine, two luxury apartment towers totaling 393 units in Hollywood, Calif. Advanced Real Estate was the buyer. The 200-unit and 193-unit properties were the last multifamily assets owned by the Los Angeles-based REIT in its hometown.
According to Advanced, it was the largest multifamily asset sale to take place this year in Southern California. Advanced secured two separate, uncrossed loans totaling $141.4 million from Freddie Mac. The 10-year loans carry a 5.17 percent fixed-rate with interest-only payments.
Sky Hollywood and Jardine account for two of only five apartment towers in Hollywood and account for more than half of the area’s high-rise units, according to Advanced. The firm notes that this transaction brings its multifamily portfolio to nearly 13,000 units in Southern California, and it has plans to acquire more properties throughout the year.
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Following the sale, Advanced Real Estate has renamed Columbia Square Living, a 19-story tower at 1550 N. El Centro Ave. to Sky Hollywood. Jardine, also a 19-story high-rise, is located at 6390 DeLongpre Ave. in Kilroy’s On Vine mixed-use campus that features creative office space with tenants including Netflix.
Sky Hollywood is situated within Columbia Square, the former home of CBS’s West Coast radio and television operations. Kilroy developed the former studio site into a media village with Class A workspaces, collaborative indoor/outdoor areas, dining options and the 200-unit residential tower.
Advanced activities
For Advanced, the purchase was the third acquisition made through its newest Opportunity Fund— Advanced Fund 24-3. In December, the firm acquired Newhope Village, a 104-unit property in Santa Ana, Calif., through the fund. Two months earlier, Advanced purchased The Cove, a 138-unit property in West Covina, Calif.
The financing was procured by Kevin Mackenzie, president of JLL’s Capital Markets Group for the Americas, along with JLL’s Orange County-based Capital Markets team, including Senior Managing Director Greg Brown and Director Charlie Vorsheck.
The transaction for Sky Hollywood and Jardine was brokered by Blake Rogers, senior managing director and National Multi-Housing Group Leader at JLL, Senior Director Dillon Bergum and Managing Directors Alexandra Caniglia and Kip Malo of JLL Capital Markets.
Cosmetic upgrades to the two towers will be administered through Advanced’s affiliated construction company, R3 Construction Services. The properties will be managed in-house by Advanced Management Co.
Hollywood high-rise highlights
The tower at Columbia Square, initially known as Hollywood Proper Residences, was in 2016. A year later, the property became the first residential community to earn WELL Multifamily Residential Certification under the WELL Building Standard, according to Multi-Housing News reporting. It is also a LEED-Certified Gold building.
The Sky Hollywood tower has one- and two-bedroom units ranging in size from 752 to 1,402 square feet and four penthouses. One penthouse has 2,172 square feet in a one-bedroom layout. The remaining penthouses have three-bedroom floorplans and range from 2,171 to 2,582 square feet. Rents range from $4,274 to $5,272 for the lower floor residences and as much as $14,405 for the penthouses, according to Yardi Matrix data.
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Jardine came online in 2021. It has studio, one- and two-bedroom units ranging in size from 468 to 1,304 square feet and nine penthouse units ranging from 1,440 to 2,658 square feet. Rents range from $2,744 to $6,988 for the lower floors. Penthouse rents range from $11,597 to approximately $20,000, the same source shows.
Both towers feature floor-to-ceiling windows and appliances in the residences along with private balconies and patios in select units. Amenities include rooftop pools and fitness centers. Sky Hollywood has 33,000 square feet of retail space.
Kilroy’s capital recycling strategy
For Kilroy, the disposition of the two Hollywood towers came at the same time it announced the $21 million sale of Del Mar Tech Center, a 39,000-square-foot office building in the Del Mar submarket of San Diego. The dispositions of non-core and non-strategic properties were part of the REIT’s capital recycling activities in the first quarter, which also included the January sale of Kilroy Sabre Springs, a 428,000-square-foot, three-building, Class A office campus in North San Diego, for $124.5 million.
Eliott Trencher, Kilroy’s Chief Investment Officer, told analysts Tuesday during the first-quarter earnings call that the two residential towers were “separate and distinct” from the office properties within the Columbia Square and On Vine projects.
“We determined these buildings would be good sales candidates given the lack of synergies with the office as well as the depth of demand for high-quality apartments,” Trencher told the analysts.
