Retail Office – 4600 Van Nuys Blvd

Retail Office – 4600 Van Nuys Blvd

Single Tenant Retail.
Development 56,000 Sq. Ft.
Parking lot 90,000 Sq. Ft..
4600 Van Nuys Blvd, Los Angeles, CA

THE FULL STORY

Spotting Value

1204N was acquired with a view of transforming it into a high end rental or my personal residence. This Bank of America REO 1 bed, 853 sf property was impacted by the fallout of the 2007-2009 Great Recession and as such was acquired all cash on an as-is basis. The building itself was struggling financially with many notices of defaults, making it hard to secure financing but this is often where value can be created.

Spotting Value

It was very easy to spot the value in this property. The land was situated in an incredibly strong location. It was very close to the intersection of two freeways so there was always going to be a lot of traffic and subsequently, a lot of footfall for the business that would eventually be utilizing the property.

multi-family apartment in beverly hills ca, outside front view with side entrances, real estate investment
multi-family apartment in beverly hills ca, outside view of side entrance at night, real estate investment

Investment Outlook

The investment outlook was promising. The land itself was bought with cash so there was virtually no risk. We knew that we had a lot of options in terms of the projects that could be built upon the land.

Our assessment of the market indicated that major tenants would be interested in that location and that the property would yield good cash flow as a result of that.

1200 wilshire
256 26th street

Condition at Purchase

Since it was purchased on an as-is basis, the property’s characteristics at that time weren’t great but we sensed that there was value there to extract. This was a unique unit situated on the 12th floor with a great 180-degree view. It also had a balcony. The banks were assigning value to this unit compared to others but that wasn’t exactly a fair comparison owing to the dynamics at play here. We saw inherent value.

The property’s condition at purchase was less than ideal. There was mold, outdated Formica countertops, and floorings that had been laid on top of floorings over the years. The unit’s hallway was a waste of space that could have been better utilized as closet space (a desperately needed addition) or a small den. Everything was in need of updating but there was plenty of space to execute that plan.

Condition at Purchase

There was no construction on the land when it was acquired. We would build accordingly based on the tenant that we signed on. Ultimately, this property was developed as a single tenant retail location.

Leading nationwide consumer electronics retailer Best Buy was the tenant that leased the property from us. There was potential in the property to go with an even bigger project, such as a Home Depot, but that wouldn’t fit with the needs of the community.

How We Added Value to the Property

We knew that given the location, there would be a lot of upside on the property and that attracting a major tenant wouldn’t be that big of a problem. Thus plans were drawn up to construct a single tenant retail outlet on the property.

1200 wilshire
256 26th street

Our Confidence

Despite the dilapidated condition of the property, we were confident that this was an up-and-coming neighborhood that was evolving into even a more vibrant community. The younger demographic would result in a spike in demand for modern homes.

We capitalized on that opportunity to build out the property and it has eventually proven to be a hidden gem – and honestly one we should have kept.

What We Were Confident About

Despite the dilapidated condition of the property, we were confident that this was an up-and-coming neighborhood that was evolving into even a more vibrant community. The younger demographic would result in a spike in demand for modern homes.

We capitalized on that opportunity to build out the property and it has eventually proven to be a hidden gem – and honestly one we should have kept.

1600 west plano parkway

What We Were Confident About

I was confident about the upside potential on this deal. Not only was the land value poised to go up significantly, the attractive location would also fetch top-dollar in rent from long-term tenants who would be interested in setting up shop in a high visibility area.

The inherent value of the location and the value that was added to it through construction ended up yielding a significant return, even during the 2008 downturn, when this property was sold for a significant return.

REGISTER FOR NEWSLETTER

WELCOME TO SIGNET INVESTMENTS

Stay connected with us by registering for our newsletter. It contains market information, business insights, new podcast discussions with experts, investment opportunities, ongoing projects and other real estate related matters. We love to hear from you so always feel free to reach out.

.