Olive Hill Group has formed a joint venture with Artemis Real Estate Partners to recapitalize 520 Broadway, a 112,756-square-foot office building in Santa Monica, Calif. Olive Hill acquired the property in 2017 for $117 million and will remain its operator. Sources quoted by the Real Deal said the recapitalization is worth $119 million.
“This is a quality creative office property in a high-barrier, core location just blocks from the beach,” Michael Cho, Olive Hill’s principal, told Commercial Property Executive. “We purchased it in December 2017 with a mid- to long-term hold strategy for a core-plus asset and it made sense to bring in a partner who shared the same vision. The timing was also right since there is one under-market lease at 520 Broadway soon to open that would provide an upside to us and to Artemis.”
Located at its namesake address, 520 Broadway is within walking distance of the Santa Monica light rail station, Third Street Promenade and Santa Monica Place. It is also close to nearly 350 luxury multifamily units. Originally built in 1981, the building underwent $13.2 million in renovations in 2013. Amenities include a four-story subterranean parking structure, 24-hour manned security and a newly renovated exterior plaza.
“520 Broadway is a building that caters to creative and technology tenants in Santa Monica’s robust Silicon Beach market—a market in which there is a wealth of new activity and in which we are experts,” Cho said. “The property has attracted many national credit tenants, including WeWork—which is occupying three floors of space—Solar Reserve, Flywheel and Goodwin Procter.”
A full tenant roster
Last November, international law firm Goodwin Procter signed a 20,500-square-foot lease on the top floor of the building, bringing the property to full occupancy. When Olive Hill took ownership of the asset a year earlier, it was only 88 percent occupied. According to Yardi Matrix data, WeWork, Boston Private, SolarReserve and Flywheel Sports are also among the tenants of the building.
“Santa Monica is an easily walkable city that offers a significant amount of newly developed housing and promotes the live/work/play balanced lifestyle that today’s workforce seeks. Silicon Beach is a thriving tech and media center for young professionals in Los Angeles,” Cho added.
Manatt Phelps & Phillips’ Steven Edwards, Grace Winters, Jeff Mannisto and Nairi Siddiqi represented Olive Hill in the deal. Amy Carbins, Naftali Weg, Lucien White and Lauren Rico from DLA Piper worked on behalf of Artemis Real Estate Partners.