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Melrose Ave. Retail Strip Sells for $22.9M

JV Acquires Fully Leased West Hollywood Building
April 11, 2018
A prime multi-tenant retail building on a popular stretch of Melrose Avenue in West Hollywood has been scooped up for $22.9 million, or more than $2,000 per square foot, by a joint venture between Chicago-based L3 Capital and Boston’s Guggenheim Real Estate.

Malibu-based American Commercial Equities sold the fully-leased, 11,295-square-foot property located at 8420-8430 Melrose Ave. The asset is home to the Kardashians’ Dash store, the clothier Theory, and lifestyle brand Serena & Lily.

Carine Mamann, a senior director with Cushman & Wakefield who represented the buyers in the sale, said L3 Capital and Guggenheim Real Estate are interested in investing in the neighborhood for the long term.

“The area is located on a stretch of Melrose that is really an extension of Melrose Place,” Mamann said in a statement. “The building is located on a prime corner directly across from Marc Jacobs, A.P.C and Outdoor Voices. People can park close by and walk the area.”

The 70-year-old property, which includes 18 surface parking spaces, last sold in June 2007 for an undisclosed sum, according to CoStar data.
See CoStar COMPS #1343343.

The presence of the Kardashians' store more than likely sweetened the deal, according to Gabe Kadosh, vice president of retail services for Colliers International.

“The Kardashian name has a global influence,” Kadosh tells CoStar News. “This area of Melrose is hot. The sales price is reflective of that. I do believe the sales price would be high if it was another hip tenant, but the Kardashian name gives it that extra buzz. They have been relevant for so long while others have faded, have a continuing strong media presence and international reach.”

However, Matthew May, president of May Realty Advisors, is not convinced the Dash store played a role.

Deal Summary:

Building: 8420-8430 Melrose Ave.

Size: 11,295 SF

Price: $22.9 million

Seller: American Commercial Equities

 Broker(s): David Ickovics - Commercial Asset Group

Buyer: Guggenheim Real Estate and L3 Capital

 Broker(s): Kazuko Morgan and Carine Mamann - Cushman & Wakefield
“From an investor's point of view, they look at the location of the real estate, the financial strength of the tenant and the rent they are paying,” May said, noting that as a value investor, L3 Capital is about the bottom line. “If they are buying a larger multi-tenant property and the anchor is a good draw for the adjacent spaces then the ‘cool’ factor can be more important. An Amazon warehouse is not ‘cool,’ but the credit is what makes it sexy.”

Please refer to CoStar COMPS #4193482 for more information on this transaction.



Karen Jordan, Los Angeles Market Reporter  CoStar Group   
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