Real Estate
L&R Buys Downtown LA Parking Lot for $20M, $249/Sq Ft
L&R acquires Downtown LA lot for $20M, paying $249 per square foot, surpassing office building prices.
Key Takeaway
- L&R Group of Companies purchased a 2-acre parking lot in Downtown LA for $20 million, or $249 per square foot.
- This price surpasses recent sales of some office buildings in the area, which have traded for less than $150 per square foot.
- L&R, a major parking operator and landlord in Downtown LA, continues to expand its portfolio with this acquisition.
A Landmark Deal in Downtown LA
In a striking transaction that underscores the evolving dynamics of the real estate market, L&R Group of Companies has acquired a 2-acre block of land in Downtown Los Angeles for $20 million, translating to an impressive $249 per square foot. This purchase, brokered by Cushman & Wakefield's Mike Condon Jr., highlights the premium value placed on strategically located urban land, even surpassing the per-square-foot prices of some office buildings in the area. The property, located at 1032 Main Street between 11th Street and Olympic Boulevard, includes two buildings and a sprawling parking lot, previously owned by an entity tied to Aron Harkham, son of hotelier Efram Harkham.
The Details of the Transaction
The 80,300-square-foot lot's sale at $249 per square foot is particularly notable given the current market conditions. Many office buildings in Downtown LA have been trading for significantly less, with some deals closing at under $150 per square foot due to high vacancy rates and dwindling tenant interest. For instance, Adam Rubin, who runs L&R, recently acquired the AON Center at 707 Wilshire Boulevard for just $134 per square foot. This stark contrast in pricing underscores the unique value and potential seen in prime land parcels compared to traditional office spaces.
Market Dynamics and Comparisons
The broader real estate market in Los Angeles and beyond is witnessing varied trends. For example, Primestor's recent acquisition of the Hilltop Plaza mall in Richmond for $36.5 million, or $148 per square foot, illustrates the differing valuations across property types and locations. While retail centers like Hilltop Plaza offer strategic infill opportunities and cater to expanding minority populations, urban land in prime locations like Downtown LA commands a premium due to its potential for diverse future developments.
Implications for Urban Real Estate
The acquisition by L&R Group of Companies is emblematic of a broader trend where prime urban land is increasingly valued for its potential to support mixed-use developments, parking facilities, and other high-demand urban infrastructure. This trend is driven by the strategic importance of such locations, which offer high barriers to entry and significant long-term value. The deal also reflects a shift in investor focus towards assets that can be repurposed or developed to meet evolving urban needs, as seen in Primestor's community-oriented projects and Prologis' plans for the Hilltop Mall redevelopment.
