A patch of green in one of Los Angeles' most coveted neighborhoods is poised for a major transformation after trading hands in a high-ticket deal that underscores demand for infill residential space on the city's west side.
Sherman Oaks-based multifamily development firm BW Brody Affiliated paid a private individual investor $24 million for a 1.73-acre site at 9700-9740 W. Pico Blvd. with plans to develop a luxury apartment complex.
The per-acre price of $13.9 million marks one of the biggest Los Angeles lot sales in years among deals for parcels of at least 1 acre in size, according to CoStar data.
The price is slightly higher than a similar transaction last year, when two Hollywood parking lots previously slated for a multifamily development that stalled sold for $13 million per acre. And in Torrance, CGI+ Real Estate Investment Strategies sold an entitled 4.86-acre site in June for $40 million, or about $8 million per acre, to JPI, a Texas-based multifamily developer with a track record of large-scale projects.
The West Pico Boulevard site, once home to an office building, is near retail, dining and the employment hubs of Century City and Beverly Hills, and "represents a once-in-a-generation opportunity to develop over 200 units in a prime Beverlywood location,” said a statement from CBRE’s Melinda Russell.
The property generated 11 offers in 45 days, Russell said. The buyer, which manages a portfolio of luxury apartments across Greater Los Angeles including the 113-unit Metro Art Sherman Oaks at 14140 Moorpark St. and the 62-unit Metro Art Brentwood at 11771 Montana Ave., is expected to pursue entitlements for a multifamily project.
The sale highlights demand for new housing on the west side of Los Angeles despite limited available sites. The number of units under construction across the city is down by 20%, and most are in Downtown, Koreatown and east side neighborhoods, according to CoStar data.
Only six large apartment projects are under construction in Los Angeles, according to CoStar data, despite the city’s pressing housing needs and monthly rents that are 30% above the national average.
While fundamentals are strong with vacancy hovering at 5% across Los Angeles, the new owner faces headwinds in completing a luxury apartment complex, including elevated construction costs, a challenging entitlement environment that favors affordable housing projects, and potential neighborhood resistance to higher-density housing.
For the record
In addition to Russell, CBRE's Josh Samuels represented both the buyer and the seller in the transaction.