SANTA MONICA, CA-The land and buildings used for auto dealership Honda of Santa Monica at 1720 Santa Monica Blvd. have been sold for just over $22 million. The tenant will continue to operate the car lot, which has been at the same site for 40 years.
The buildings on the lot are undergoing a makeover, with renovations making the dealership the first to be LEED-certified in Los Angeles County, which Honda terms a Generation 3 dealership. Honda of Santa Monica consists of a South building (new car sales, service and repair) and a North building (currently under renovations, but used for certified used car sales) located on both the North and South sides of Santa Monica Blvd. and 18th St.
The tenant, Sonic Automotive, has signed a long-term lease. The property sits on 75,000 square feet of land, with the buildings account for 50,000 of that total.
Orbell Ovaness, VP investments for Orbell Investment Group, a division of BRC Advisors Inc., and Joubin Manoochehri, president of JNM Realty Inc., represented the seller, CAR SON FIR LLC. The buyer, Lone Eagle Partners LLC, was also represented by Ovaness. The deal was at a sub 6% capitalization rate.
“The owners had owned it for some time, and basically decided to capitalize on the market,” Ovaness tells GlobeSt.com. “Given that cap rates are compressed and with the financing out there, they had a few good opportunities.”
Sonic Automotive is the third largest auto dealership operator in the nation, with over 136 automotive dealerships and 134 repair and service stations. Sonic is a publicly traded company on the New York Stock Exchange (stock symbol SAH), with annual revenues over $8 billion.
The dealership is located on Santa Monica's “Auto Row,” which extends from 20th St. to Lincoln Blvd. “The city does have plans to add mixed-use components down the line,” says Ovaness. “If Sonic moves out, that could provide the landlord an opportunity for a mixed-use or a medical office. But (Sonic) has another 11 years on the lease.”
As previously reported by GlobeSt.com, a nearby Santa Monica multifamily complex has a selection of micro-unit apartments.
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