Fund dealing Hollywood offices
A Kennedy-Wilson International fund is seeking $31.3 million for a 163,000-square-foot office building on Hollywood Boulevard.
The Hollywood, Calif., building’s asking price, equivalent to $190/sf, would produce an initial annual yield of 8%. But if a prospective retail lease is signed, the yield would jump to 9.7%.
The Class-B building, at 7080 Hollywood Boulevard, was constructed in 1968. The interior and mechanical systems were renovated in 1999. A partnership controlled by Kennedy-Wilson unsuccessfully marketed the building that year as part of a four-property package. A year later, Kennedy-Wilson rolled three of the properties, including 7080 Hollywood, into its KWI Property Fund I, an opportunistic vehicle that ultimately owned $160 million of properties in three states.
The Hollywood building’s 143,000 sf of office space is 87% occupied at an average full-service rent of about $24/sf. Asking rents are $25.20/sf. Liberty Livewire occupies 65,000 sf and Bash Entertainment occupies 9,000. Both leases run through 2007.
The 20,000 sf of retail space is 62% occupied, with triple-net asking rents of $27/sf. However, negotiations are being conducted with a potential tenant for all of the vacant space. The property includes a six-story, 500-car garage.
The 11-story building, at the corner of La Brea Avenue, overlooks the Hollywood Walk of Fame. It is adjacent to Hollywood & Highland, an underperforming entertainment/retail complex that CIM Group, a joint venture backed by Calpers and California State Teachers, bought in March from Trizec Properties of New York for $200 million.
The brokerage arm of Kennedy-Wilson, which is based in Beverly Hills, is handling the offering. For more information, call Cliff Smith at 310-887-3438.
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