$83 Million Multifamily Sale Highlights Potential Between, MacArthur Park.
Sonny Astani sees some potential for another project on the stretch of Wilshire Boulevard between downtown and McArthur Park after a recent $83 million sale of the 218-unit Wilshire Valencia apartments.
The next opportunity could be found on a patch of land owned by the Los AngelesUnified School District, according to the chairman of Astani Enterprises Inc., who tends to acquire a street-level understanding of the various neighborhoods that draw his attention and dollars as a developer.
“There are a couple of pieces I’m eyeing – a piece of vacant LAUSD land: it’s not part of their school plans,” Astani said. “And there are some older commercial buildings that I think sooner or later will sell. There is stuff out there.”
Astani declined to get too far into specifics the multifamily property, but said he did very well on the project – it was built on a 1.5-acre site that he bought for $7.6 million five years ago and opened in January. The upscale rental units replaced three small office buildings and a 29-unit apartment at the corner of Wilshire and Valencia Street.
It was an especially tough project, Astani said, with everything from the demolitions; relocation payments for tenants of the old apartments; challenges in getting an architect who would configure the Wilshire Valencia’s pool, gym, basketball court and 8,000-square foot garden to ensure plenty of sun; and the city’s entitlement process testing his mettle.
“I’ve done 5,000 units, and this 200-unit project was probably the hardest,” he said. There’s plenty to like about the stretch of Wileshire, according to Astani, which heads west from downtown through an area some call Center City West and others call West Lake district. One particular string point is that lower land prices have allowed rental units in the area to come on line at about $300 a month cheaper than downtown.
Another is MacArthur Park at Wilshire and Alvarado Street.
“It’s an unbelievable asset – a huge park with tennis courts and a lake,” he said.
Other highlights are the Los Angeles Police Department Rampart Division station at Sixth Street and Valencia; recent developments such as Spa Palace, which offers some indicators that the vibrancy of adjacent Koreatown – just to the west of the park – spilling over to Westlake; and the general momentum of the new residential and commercial developments.
Some challenges remain – Astani noted the number of homeless in the area have grown in the past couple of years, and the area around MacArthur Park can sometimes be overly vibrant, with street peddlers clogging sidewalks – although there are some bright sides to all the action (see related item in Page 3 column).
One other caution: Land has become more expensive everywhere in Los Angeles – and might be getting too pricey for entrepreneurial developers.
“Entrepreneurs make their money when they buy the land,” Astani said. “If you don’t buy land right, you’ll be working for the bank. Demand is high and there’s a lot of cash – but you have to buy the land right.”
Los Angeles Business Journal
Editor Jerry Sullivan
jsullivan@labusinessjournal.com
323 549 5225 ext 200
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