A largely vacant historic building on Broadway has changed hands for $24 million, a sky-high price that underscores the changing nature of the downtown Los Angeles street.
The nine-story Merritt building at 761 S. Broadway was purchased this week by an international investor, according to Cushman & Wakefield, the brokerage representing the seller — a group of local investors.
The purchase price of $429 a square foot is slightly below the $431 a square foot that the historic PacMutual Center sold for last year. However, that complex of buildings on 6th Street was recently rehabbed and more than 90% occupied.
"It's really high," Kelli Snyder, an associate with Cushman & Wakefield, said of the Merritt building's purchase price. "People see the potential Broadway has with all the development going on."
Among the large projects is the redevelopment of the Broadway Trade Center across the street into a retail, hotel and office complex. Developers also are adding creative offices and retail to the former home of the Herald-Examiner newspaper on 11th Street and Broadway.
At the Merritt building, built in 1915 for owner Hulett C. Merritt, the bottom floor is occupied with shops, but the top floors are vacant — a once common scenario along Broadway and Spring Street that is now less so amid downtown's real estate boom.
"There are only a select few of these historic assets left," said Mike Condon Jr., an executive managing director with Cushman & Wakefield, who along with Snyder represented the sellers.
Condon declined to disclose the buyer, but added that the new owner is weighing several options for the site, which formerly was occupied by Home Savings & Loan Assn.
One possible idea could be building out new creative offices, which have become increasingly popular downtown as real estate investors seek to lure technology companies and others with open floor plans and historic touches.
Boutique hotels also have proved popular along Broadway, especially following the success of the Ace Hotel, which opened in 2014.
Derrick Moore, a principal with Avison Young who represented the buyers, did not return a call seeking comment.
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11:25 a.m.: This article was updated to include comment from real estate agent Kelli Snyder and background on development on Broadway.