A large player in Los Angeles’ billboard scene has made a prominent deal on one of the city’s most iconic streets.
Regency Outdoor Advertising purchased a vacant retail property on the Sunset Strip for $26 million, with redevelopment plans underway for the high-profile corner.
The 8,500-square-foot building at 8830-8844 W. Sunset Blvd. sits across the street from a well-known nightclub, the Viper Room, and has 130 feet of street frontage on the Sunset Strip, a 1.7-mile stretch known for its shops, rock 'n' roll history and an array of colorful billboards.
Regency Outdoor Advertising plans to redevelop the 16,000-square-foot corner parcel within five years, though details remain under wraps for now, according to Kidder Matthews Senior Vice President Kelly Betpolice, who represented the buyer in the deal.
The Sunset Strip acquisition ranks among the most expensive retail deals in the past year in Los Angeles. The price tag of $3,058 per square foot is well above the market average of $250 per square foot, according to CoStar data. The purchase adds to a 9% year-over-year uptick in retail transactions across Los Angeles.
Though Regency is best known for leasing billboard space to advertisers across LA, the firm has been steadily expanding its real estate holdings in recent years with an eye toward hotel redevelopment.
In 2022, it paid $24 million for a former Bank of America branch at 9021 Sunset Blvd. It plans to eventually develop the site into a luxury hotel, but for now, it serves as its company headquarters. It also owns a former Jack in the Box fast-food site at 6409 W. Sunset Blvd. that's slated to be redeveloped into a 21-story, 255-room hotel called Ivar Gardens.
The seller in the latest deal is Los Angeles-based private development firm Worchell Properties, public records show. Previous tenants, a Chase Bank and a nightclub, vacated in the past month, clearing the way for a new occupant expected to move in within the next few months, Betpolice wrote in an email to CoStar News.
The sale took years to close, according to Betpolice.
“We were in escrow for approximately two years,” with the seller needing time to navigate tax strategy requirements for an exchange, Betpolice said.
The Los Angeles retail vacancy rate has risen to 6% from 5% a year ago, with tenants giving back 2.4 million more square feet than they leased over the past 12 months.
The hospitality market, meanwhile, is suffering from a slowing of leisure demand nationally. But Los Angeles is outperforming the national average when it comes to vacancy rates and revenue, according to CoStar data. Average hotel occupancy is currently 73%, up from 71% a year ago and above the national average of 64%.