CBRE announced the sale of the Adidas and Burn Fitness Building on Santa Monica’s prominent Third Street Promenade for $30.3 million to a partnership of two private Beverly Hills investors.
CBRE’s retail expert Orbell Ovaness represented the seller, San Diego Promenade Investors, LLC, a private family office. Orbell also negotiated seller financing for the transaction. The asset features high-street retail with a value-add component. It is situated in one of the busiest pedestrian districts in Southern California, with a rare 70’ frontage. This coastal location attracted more than 500 executed confidentiality agreements from interested national and international investors through CBRE’s marketing platform.
“This was a challenging endeavor; Adidas is set to move into the 1300 block of Third Street Promenade while Burn Fitness has a short term remaining on its original lease, with no option to extend,” said Ovaness.” Ultimately, I found the perfect buyer attracted to a rare chance to create value through lease-up and the reconfiguration of the building, making this an opportune mixed-use investment.”
The buyers, Golden West Properties and Starpoint Properties, were also represented by
Ovaness. The local private partnership is planning to subdivide the ground-floor retail upon Adidas’s departure and convert the balance of the building into creative office with a roof-top terrace.
With more than 15 million visitors a year, Third Street Promenade is one of the most successful pedestrian shopping centers. Together with Santa Monica Place, its estimated to attract more than $685 million of consumer spending annually, according to CBRE research. The extremely high barriers to entry mark the city of Santa Monica for its notorious anti-development reputation and complex entitlement process, making it nearly impossible to add new supply to the market.
