SANTA MONICA, CA—A recent transaction has broken the price-per-square-foot record for an office property in Santa Monica. A New York-based investor operating under 1315 Lincoln Owner LLC has purchased a 23,575-square-foot office property in Silicon Beach for $23.7 million, or $1,004 per square foot, from a partnership between Lincoln Property Co., Linwood Ventures and ASB Real Estate Investments. The sales price represents a 5% cap rate.

“This is a great time in the marketplace, and they monetized the asset and did everything that they thought they could do to create value,” Bob Safai, a broker at Madison Partners, tells GlobeSt.com about the sellers' decision to dispose of the asset. Safai represented the sellers in the transaction, along with Madison Partners brokers Matt Case and Brad Schlaak.

The fully marketed sale generated strong interest from potential buyers, eventually resulting in a total of 14 offers on the property. “We had interest nationally on the property because of the quality of the asset and because of the Santa Monica location, as well as the rent roll,” says Safai. “It was really a tight race at the end, and the pricing was very close. We chose the buyer based on the best price and the fact that they went non-refundable.”

In addition to having 100% occupancy, the property had a wealth of features that attracted buyers, not the least of which is a 136-stall parking structure, a rarity in Santa Monica. The building also has 22-foot ceilings heights and modern, creative-style floor plans. “The building was originally designed to be a bigger building with a mezzanine level, so you could potentially expand the footprint of the building; however, this ownership decided to create 22-foot ceiling heights instead,” says Safai. “This type of product is not easily built and is hard to find. The buyer came in and fell in love with it.”

With more than 600 entertainment, media and tech companies, Santa Monica is the epicenter for creative office in Los Angeles, although several other markets are bidding for creative office users, investors and developers. This sale shows the power of Santa Monica, and the L.A. market. L.A. is the hotbed for investors both nationally and internationally,” Safai says. “We are seeing it more and more in every product type.”