Hollywood land prices are garnering high prices, if a recent sale is any indication. Cresent Capital Partners paid $373 per square foot for an unentitled development sit in Hollywood at 5570 Melrose Avenue. At the time that the CBRE brokerage team of Fred Aframian, Joyce Goldstein and Ed Matevosian brought the property to market, comparable land sites were selling for $280 per square foot. Despite the aggressive pricing, the sales team received more than 400 inquires for the property.

“When we began marketing the deal, the average price for comparable land was at $280 per square foot,” Goldstein, an associate at CBRE, tells GlobeSt.com. “We educated our sellers on the market, but also ensured them that we would achieve top of pricing through our marketing efforts. We collectively agreed to list the property at an aggressive price point, well above market average. We hit 99% of our asking price; so it was a great success.”

One of the reasons that the site was able to attract such high pricing is because the seller, Kessab LP, which is the owner-operator of West Hollywood Automotive Service Center, was willing to hold the property during the entitlement period. “This site was priced on the higher side, and the reason it worked was because the seller was able to carry the property while the buyer was obtaining the entitlements,” explains Aframian, a senior associate at CBRE, tells GlobeSt.com. “That's not always the case. Many sellers want the higher prices but aren't able to or want to hold on. Also, cost of construction isn't where it was a year ago. These cost increases have negatively affected the valuation of development sites.”