A 60-unit historic-cultural building consisting of large open space lofts with street-level commercial and retail space has recently been placed for sale in the Little Tokyo neighborhood of downtown Los Angeles. According to the listing for the property by Colliers, the asset is offered at $45 million, or $750,000 per unit. The cap rate on the building is listed at 5 percent, which is slightly higher than the average of 4.2 percent over the last year in this area of downtown Los Angeles, according to industry reports reviewed by The Registry.
The Class-A building is located at 443 South San Pedro Street and totals roughly 92,500 square feet. 443 S. San Pedro St. is a fully renovated adaptive live/work reuse apartment building located on a 19,320-square-foot parcel. The building consists of 58 newly-renovated oversized loft-type residential apartments and two street-level commercial units.
The property is owned by an entity associated with Kent Hawkins, who is a managing director of Colony Energy Partners. The Tailor Lofts LLC has owned the property since September of 2016, when it purchased the building for $20,050,000. Since then, the company has spent additional money to help renovate the building, which was completed in 2021.
The 6-story property was originally built in 1923, and the extensive renovations included a rooftop deck with views over downtown Los Angeles. In addition, the upgrades included the addition of a GamerHive eSports arena in the commercial space on the ground floor. The building is further serviced by an exclusive and secure adjacent parking lot.
Members of the team marketing the property at Colliers include Mark Tarczynski, executive vice president, and Adam Tischer, senior vice president, from the firm’s Los Angeles office.
Situated at the southern edge of Little Tokyo district, a fast-growing and rapidly gentrifying community, and in between the Toy and the Arts Districts of downtown Los Angeles, the property is in close proximity to some of the city’s iconic venues, such as Walt Disney concert Hall, LA Live, and Crypto.com Arena. The building is also located near many of downtown Los Angeles’ top-rated restaurants and bars. Finally, the development has excellent transport links with easy access to Interstate-10, Interstate-101 and Interstate-110 freeways.
According to the Kidder Mathews 4Q22 Market Trends Los Angeles Multifamily report, the multifamily market in Los Angeles is showing signs of robustness. Although vacancies seem to have gone up in the fourth quarter of 2022, rental rates have also increased due to improving macroeconomic factors such as reduced unemployment and lower construction deliveries. The latest noteworthy property sale in the area was THEA at Metropolis in South Park, a 685-unit building, which was purchased by a real estate private equity firm Northland for $504 million or approximately $735,000 per unit. Some of the other transactions include the sale of The Vermont in Koreatown, a 464-unit property, which was sold to Harbor Group International for $235 million, or just over $506,000 per unit. 90-unit San Vincente Tower located North of Montana sold for $39.7 million or around $441,000 per unit; 86-unit San Pasqual in South Lake sold for $38 million or just under $442,000 per unit; and 85-unit LA1440 & LA1446 in Tujunga sold for $38 million or around $447,000 per unit.