The five-story building on the Third Street Promenade that leases to Subway and McDonald’s has been acquired for $20.5 million, after Lincoln Property Company partnered with Centennial Real Estate for the deal.
The companies said a series of renovations will begin soon to bring new dining options and creative office space to the building.
Built in 1992 as a dining anchor for Santa Monica’s Third Street Promenade, the first two levels of the 27,000 square-foot building are currently dedicated to a variety of quick-serve restaurants. The available restaurant space is approximately 50 percent occupied.
The third floor of the property serves as home to an ELS Language School and the top two levels are currently vacant.
Beginning as soon as spring 2014, Lincoln and Centennial will jumpstart a series of renovations valued at $4 million to create a more modern dining space with plenty of natural light and an open, marketplace feel.
The partners will also transform the vacant top two levels into creative office space with high ceilings and open layouts to appeal to the growing contingent of creative and technology-driven tenants in Santa Monica.
David Binswanger, Executive Vice President at Lincoln Property Company, said the property was one of the best-located buildings on the Third Street Promenade, with enormous upside potential.
“We consider this acquisition a prime opportunity to help fill the shortage of fast-serve restaurant options and creative office space for the 50,000 people who visit this part of Santa Monica each day,” Binswanger said. “We are very excited to commence construction and debut what promises to be a central gathering spot for local shoppers, employees and residents.”
The purchase of the Third Street Promenade property represents the fifth joint-venture acquisition for Lincoln and Centennial in the past three years. The partners currently own three other properties in Santa Monica and one in Pacific Palisades.
Scott Schonfeld, Managing Partner of Centennial Real Estate, said the purchase of this mixed-use building in Santa Monica fitted squarely in its strategy of acquiring underutilized assets in “A+ locations” throughout the Los Angeles area.
“We have a very successful partnership with Lincoln Property Company, and we look forward to continuing our work together as we purchase and add value to these well-located and highly compelling properties,” Schonfeld said.