Glendale Fashion Center Sold to Encino-Based Investors
The recently renovated Glendale Fashion Center has been sold for $57.2 million to a family business based in Encino.
The sale is part of a string of recent deals that illustrate the bigger role private investors are playing in the commercial real estate market after years of being pushed aside by public and institutional rivals.
“It’s the return of the private investor,” said Cushman & Wakefield Inc. broker Carl Muhlstein, who was involved in several recent deals where private investors came out on top.
Glendale Fashion Associates LLC, which is headed by Marianne J. Moy, beat out bidders that included institutional firms to purchase the nearly nine-acre, Glendale Fashion Center from a partnership of Vestar Development Co. and Lend Lease Real Estate Investments. The 264,474-square-foot complex on Glendale Boulevard at Wilson Avenue is fully leased to Ralphs supermarket, Longs Drugs, Barnes & Noble, Nordstrom Rack and other national retailers.
“Very often now sellers are starting to pay attention to private investors,” said Randall Lee, president of Lilly Enterprises Inc., who represented the buyer. “This is an example of a private investor off the radar screen who had the ability to properly evaluate a complex real estate investment opportunity and had the sophistication to do a transaction.”
Real estate experts said sellers prefer to deal with larger and well-known real estate investment trusts and institutional investors before considering a more obscure private bidder. “It’s all about credibility and relationships,” said CB Richard Ellis broker Hamo Rostamian, who also represented the buyer of Glendale Fashion Center. The seller was represented by Larry Krasner of Insignia/ESG Inc.
But the slowing national economy finds many of the large REITs and institutional investors reluctant to enter the market as rents and values peak. Some property types, such as suburban office parks and hotels, have fallen into disfavor with buyers who must answer to shareholders and clients. Also, larger REITs and pension funds tend to buy entire portfolios and companies instead of individual buildings.
As a result, current conditions give private investors more opportunity to strike a deal with sellers of small and mid-size properties, according to brokers.
“Because the opportunity funds, REITs and all-cash buyers are not in the market right now, it makes room for the smaller guys,” said commercial real estate mortgage broker Paul Brindley at Holliday, Fenoglio, Fowler.
Many owners “are selling suburban office holdings, which is creating buying environments for private investors,” Muhlstein said.
