A long-vacant site in the heart of downtown Los Angeles has been sold to investors who are expected to start work within two months on one of the largest new apartment buildings to be built in the region since the economic downturn.
The seller was Beverly Hills developer Sonny Astani, who secured city approval to build a 700-unit, steel and glass apartment building with a rooftop pool on nearly a full city block. It would include enough ground floor retail space for a grocery store and almost an acre of open space.
The development would cost $300 million to build and house about 1,000 residents on what is now a three-acre parking lot on 8th Street flanked by Grand Avenue and Olive Street. The existing buildings on the block are early 20th-century office structures, facing 7th Street, including the Brockman Lofts.
A 40-foot pool on the roof of the eighth floor surrounded by cabanas, a lounge and barbecues would be the centerpiece of the development, said Astani, who won’t be involved in building the project. "It was a complicated structural engineering process to design it," he said of the large pool.
Astani sold the entitled land to a Colorado limited liability corporation called CPIVG8 for $63 million. At $500 per square foot, it was one of the most expensive land deals ever in downtown L.A., Astani said.
With vacancy falling and rents rising in much of Southern California, however, apartments are considered a choice investment among many institutional and individual investors.
"Downtown is a great center for job growth and the multifamily market has stayed vibrant through the downturn," real estate broker Bradford McCarthy of CBRE Group Inc. said.
Astani built the $260-million Concerto, a 30-story condominium tower a few blocks away at 9th and Figueroa streets. He sold his interest in the property in 2011 after a complex legal battle with hedge fund Starwood Group after federal regulators seized control of Astani's lender.