8560 - 8590 West Sunset Boulevard | West Hollywood | California
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8560 - 8590 WEST SUNSET BOULEVARD | WEST HOLLYWOOD | CALIFORNIA ICONIC MIXED-USE INVESTMENT OFFERING Holliday Fenoglio Fowler, L.P. acting by and through Holliday GP Corp. a California licensed real estate broker California License Number 01385740 (“HFF”). 2 THE SUNSET Holliday Fenoglio Fowler, L.P. (“HFF”), as the exclusive advisor, is pleased to present the rare opportunity to acquire a 100% fee simple interest(1) in The Sunset, an iconic 178,699 square foot mixed-use property located on the world famous Sunset Boulevard in the heart of West Hollywood, California. As one of the premier experiential mixed-use destination campuses in West Los Angeles, The Sunset (the “Property” or the “Building”) encompasses 2.22 acres and boasts a preeminent 10-story, 71,875 square foot Class A office tower (the “Office Tower”) with a 2-level, 25 stall subterranean parking garage, a three building high-end retail and office complex (the “Retail Plaza”) totaling 106,824 square feet and a 4-level, 906 stall shared underground parking garage. The total available parking spaces to the Property is 931 stalls resulting in a parking ratio of 5.21:1,000 SF. Currently 90.4% leased, The Sunset provides a unique diversification of cash flow attained through the commercial retail and office component, parking and billboard/signage advertising opportunities. The rapidly urbanizing Sunset Strip, L.A.’s equivalent of Times Square, has experienced an unprecedented explosion of upscale residences, shopping, dining, and hotel development benefiting the Property. Boasting nearly 420 feet of street frontage on Sunset Boulevard combined with its central West Hollywood location, contributes to the Property’s brand as a world class mixed-use experiential destination, featuring some of the world’s most recognizable brands in fashion and health/fitness, such as Equinox, SoulCycle, H&M, and Oliver Peoples. The walkable amenity base and unique position within an evolving market will solidify The Sunset as an ideal location for office and retail tenants alike. (1) Tall wall signages on the office tower are subject to an easement and excluded from this offering . INVESTMENT 3 SUMMARY PROPERTY OVERVIEW OFFICE TOWER ADDRESS NET RENTABLE AREA YEAR BUILT/RENOVATED PARKING STALLS # OF STORIES % LEASED 1963 8560 West Sunset Boulevard 71,875 SF 25 10 79.6% 2001 (Full Renovation)/2007 RETAIL PLAZA ADDRESS NET RENTABLE AREA YEAR BUILT/RENOVATED # OF STORIES % LEASED 8570 West Sunset Boulevard 43,603 SF 2002/2007 2 97.8% 8580 West Sunset Boulevard 7,126 SF 2002/2007 1 100.0% 8590 West Sunset Boulevard 56,095 SF 2002/2007 2 97.3% Retail Plaza Totals: 106,824 SF 906(1) 97.7% Property Totals: 178,699 SF 931 90.4% (1) Parking is subject to easement and parking agreements. MAJOR TENANT SUMMARY % of NRA: 25.7% % of NRA: 10.1% % of NRA: 8.2% % of NRA: 7.9% % of NRA: 4.1% % of NRA: 4.0% % of NRA: 3.3% % of NRA: 2.3% 4 ICONIC EXPERIENTIAL MIXED-USE ASSET • As companies continue to use real estate as a recruitment and retention tool to attract TOTAL RENTABLE SQUARE FOOTAGE the best of the best talent, The Sunset offers an unrivaled mixed-use experiential campus COMPONENT DETAIL in an iconic location within walking distance of everything the famous Sunset Strip has to offer. RETAIL 18% • The Office Tower has undergone a multi-million dollar capital renovation, including a new exterior skin designed by the renowned Nadel Architects. The 10-story Class A office tower features incredible views from the Pacific Ocean to Downtown Los Angeles, modern finishes and upgraded lobby, flexible floor plates and has been awarded an Energy Star label for four consecutive years. Additionally, in 2013 the building earned a LEED Gold certification. OFFICE • The Retail Plaza is anchored by Equinox and consistently ranks as one of their best 54% performing gyms nationally. Additional tenants include H&M, which is the second LUXURY GYM largest global clothing retailer, SoulCycle and Café Primo. In addition to the retail space, 28% H&M utilizes a portion of the second floor plaza space as their West Coast real estate headquarters and showroom. WORLD FAMOUS ADDRESS, DEEP AMENITY BASE The billboard-lined Sunset Strip has evolved into the top nightlife destination in Los Angeles and features a premier collection of restaurants, stores, bars and nightclubs frequented by celebrities and socialites alike. PROXIMITY TO AFFLUENT DEMOGRAPHICS The Sunset’s central West Hollywood location adjacent to Beverly Hills, proximity to entertainment giants and affluent surrounding demographics has attracted a critical mass of talented young workers into the market, giving businesses in the area a competitive advantage. Hollywood Hills, an affluent neighborhood popular with celebrities, achieves average home prices over $5MM, with some neighborhoods averaging $20MM and current listings exceeding $70MM. 232,656 $103,897 $2,000,000 59% 1,566 Population 2015 Est. Avg. Average Home Price % Bachelor Degree Number of Home Sales Household Income or Higher Over $2 million SIGNIFICANT PUBLIC AND PRIVATE INVESTMENT Over $1.2 billion in recently completed, ongoing and planned developments exist within walking distance of The Sunset. Notably Sunset La Cienega, located adjacent to the Project, will feature two 10-story hotel towers totaling 296 keys and two 8-story luxury residential towers with nearly 190 units. EXECUTIVE 5 SUMMARY ROBUST LEASING MOMENTUM Since 2014, the West Hollywood office market has experienced significant net absorption of over 400,000 square feet, totaling +/- 16% of the Class A inventory. With minimal office supply under construction, office market fundamentals are forecasted to remain vigorous with current office rents rivaling Downtown Santa Monica and the Beverly Hills Triangle. HIGHLY DESIRABLE BILLBOARD AND SIGNAGE ADVERTISEMENT SPACE(2) The Sunset presents a unique opportunity to drive value through signage revenues. The Property features numerous, highly visible, signage options in one of the nation’s most prominent advertising markets, aptly considered the “Times Square” of the West Coast. • The Sunset Strip ranks as the 5th most visited tourist destination in L.A. with over 1 million visitors per year who spend nearly $1 billion annually in West Hollywood. • Over 105,000 vehicles pass in front of the Property each day. • Potential additional digital and billboard development exists . DIVERSIFIED CASH FLOW WITH UPSIDE POTENTIAL • Only 12.3% of tenants in occupancy expire through March 2020, providing investors a stable near-term and diversified income stream. • An immediate value-add opportunity exists through the lease-up of the 17,143 square feet of vacant space. • A total of 69.1% of the existing tenants expire between 2020-2023 with weighted average in-place rents 30% below market, presenting a significant mark-to-market opportunity to generate an incremental $2.3 million in NOI. (2) Excludes tall wall signage on the office tower GROSS RENT (UPON EXPIRATION) VS. MARKET RENT ) $10.00 35.0% G $9.00 29.8% $9.05 S 30.0% F $8.47 $8.00 $7.46 $7.80 $7.97 . $6.97 s $7.00 $6.98 25.0% o $6.47 $6.99 $6.23 $6.00 $5.59 $5.16 M 20.0% / $5.00 $5.06 $5.57 $5.87 $5.31 F $5.22 15.4% S 13.1% 15.0% $4.00 $4.21 10.8% P ( $3.00 10.0% t 7.0% n $2.00 3.3% 4.1% e 1.9% 5.0% $1.00 % of SF Expiring R $0.00 0.0% % RSF Expiring (Re-measured) Gross Rent Upon Expiration Market Rent Malibu 7 PACIFIC OCEAN SANTA MONICA VENICE SIERRA TOWERS CENTURY CITY SOHO HOUSE MEMBERS ONLY BEVERLY HILLS TRIANGLE/ THE EDITION HOTEL CLUB & BOA STEAKHOUSE BEVERLY CENTER RODEO DRIVE (Marriott, Witkoff Group, New Valley) MALL + West Coast flagship of the BEVERLY Edition concept HILLS HOLLYWOOD + 148 Keys + 20 High-End Condos HILLS + Unique food & entertainment offerings + Full spa and nightlife venues RAINBOW ROOM CEDAR SINAI HOSPITAL WHISKY-A-GO-GO PACIFIC DESIGN CENTER SUNSET LA CIENEGA - CIM WEST HOLLYWOOD (COMING MARCH 2017) Over 526,240 SF THE JAMES HOTEL + 296 Keys + Two 10-Story Towers + Ground floor retail and restaurant The Hollywood Hills is the 8500 SUNSET, THE RESIDENCES premier address for high-end + 190 Upscale Units + Two 8-Story Towers residential in West Hollywood. + Open Air Plaza Home prices average about $5M with some neighborhoods MONDRIAN HOTEL exceeding $20M. THE PENDRY WEST HOLLYWOOD KATANA + Montage Resorts’ flagship lifestyle hotel RESTAURANT + 149 Keys + 45 High-End Condos + 6k SF Digital Signage + 25k SF entertainment and dining venues + Multiple rooftop decks and lounges SUNSETSUNSET BLVD.BLVD. SUNSET TOWER HOTEL ANDAZ (HYATT) HOTEL 91 ACCESS TO EXECUTIVE HOUSING WALK 1 Minute – to Hollywood Hills SCORE 7 Minutes – to Beverly Hills 10 Minutes – to Hollywood & Highland 15 Minutes – to Century City 20 Minutes – to Santa Monica ONE OF THE WEST COAST’S MOST WALKABLE CITIES 8 8560 WEST SUNSET BLVD. OFFICE 71,875 SF 8570 WEST SUNSET BLVD. OFFICE AND RETAIL 43,603 SF 8580 WEST SUNSET BLVD. RETAIL 7,126 SF 8590 WEST SUNSET BLVD. RETAIL 56,095 SF TALL WALL SIGNAGE (NAP) BILLBOARD G BILLBOARD F BILLBOARD D The Sunset features a total of 931 stalls for a parking ratio of 5.21 per 1,000 SF. The parking is provided in a four-level subterranean structure beneath the Retail Plaza with 25 VIP stalls available to office tenants beneath the Tower. INVESTMENT ADVISORS MICHAEL LEGGETT RYAN GALLAGHER ANDREW HARPER BRYAN LEY TIM GEIMAN MICHAEL MATCHETT Senior Managing Director Senior Managing Director Director Managing Director Director Analyst 415.276.6924 949.798.4100 310.407.2139 310.407. 2120 949.798.4109 310.407.2132 [email protected] [email protected] [email protected] [email protected] [email protected] [email protected] CA Lic.