A family-owned Los Angeles real estate firm bought the Beverly Sunset Medical Building in West Hollywood from Arden Realty for $33 million.
Mani Bros. Real Estate Investment paid 15% more for the building than Arden did five years ago, a sign that the Westside medical office market continues to perform well for landlords.
Arden, the region's largest office landlord, bought the building in late 1997 for $28.8 million, according to real estate data provider CoStar Group Inc. The nine-story, 158,585-square-foot building at the west end of the Sunset Strip is about 75% occupied with doctors and dentists, said Beverly Hills real estate broker Joel Frank, who represented Arden in the deal.
Simon Mani, a Mani Bros. principal, said the firm would spend more than $3 million to renovate the building "into a Class A medical tower."
Among the commercial properties owned by Mani Bros. are 9000 Sunset and Piazza del Sol, both on the Sunset Strip. The company also owns the 24-story Figueroa Tower in downtown Los Angeles and Portofino Plaza in Santa Monica.
Arden sold the building at 9201 W. Sunset Blvd. because it had "matured" as an investment and wasn't close enough to its other properties to provide economies of scale, said Brooke Lauter, a spokeswoman for the Los Angeles real estate investment trust.
Medical buildings recently have outperformed standard office buildings on the Westside, said broker Frank, of First Property Realty Corp. Medical office vacancy rates in that market have fallen from 10% to 6% since early 2002, he said, while average vacancy in standard offices has grown from 7% to 15%.
"The highest-skill-set physicians tend to locate on the Westside because there is a wealthy bedroom community that is paying extra-close attention to their medical needs, including elective surgery and high-end dental work," Frank said.
The average monthly rent at a Westside medical building is $2.75 per square foot, he said, compared with about $2.25 for traditional offices.