Los Angeles
A BMW dealership in Beverly Hills has traded hands for a record-breaking price. The 339,000-square-foot trophy asset sold for $70 million, the highest price paid for a car dealership in the Los Angeles market, GlobeSt.com has learned exclusively.
“We were able to achieve a considerable amount of interest and competitive pricing due to a combination of platform and property,” Kyle Matthews, chairman and CEO of Matthews Real Estate Investment Services, tells GlobeSt.com. “When you have a property with this type of location and tenant, it’s reasonable to expect substantial interest. However, the most significant driving factors were our marketing and technology platforms. Through these, we were able to leverage our centralized database of hundreds of thousands of potential buyers and receive alerts in real-time about buyer activity. Demand for this property was generated to such a high extent that a market record price and low cap rate were in many ways inevitable.” Matthews represented the seller in the deal along with market leader Bill Pedersen and EVP and national director of multifamily David Harrington.
The property was both a fully net leased asset as well as a potential development site, featuring a 93,000 square-foot state-of-of-the-art car dealership with rooftop parking and a 246,000 square-foot used auto and repair facility. As a result, Matthews executed a broad marketing strategy. “We recognized early on that we would be casting a wide net on this deal, as opposed to the targeted marketing strategy we typically run for most institutional sales we execute,” says Matthews. “We knew the profile of the investment opportunity spoke to many different buyer groups, including but not limited to high net worth family offices, syndicators, developers, private equity as well as the public REITs. You very rarely see an individual property fit so many different buyer profile’s preliminary acquisition criteria, but that is what happened in this offering.”
Ultimately, the property traded hands between a family office that had owned the property for generations and a family office with an institutional partner. “With the property owned by a family partnership for a long time, the decision to sell ultimately came down to each individual wanting to go their separate ways due to estate planning,” says Matthews. “As to the market timing, our clients understood that we are in a historically remarkable seller’s market, which amplified our ability to execute on the assignment and achieve record-breaking pricing.”
This sale not only illustrates the strong demand for quality net lease assets but also for the value of well-located land sites. “It speaks to the value that knowingly or unknowingly is locked up in the lot size or development potential in many car dealerships,” explains Matthews. “A majority of these sites are commercially zoned, which allows for a certain degree of density and typically the lot size is larger than what you normally would find available in an urban core location. By waiting out the existing lease or buying a dealership out of their lease, an investor has the opportunity to create future value through the development of the property.”
Want to continue reading?
Become a Free ALM Digital Reader.
Once you are an ALM Digital Member, you’ll receive:
- Breaking commercial real estate news and analysis, on-site and via our newsletters and custom alerts
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical coverage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
*May exclude premium content© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
Kelsi Maree Borland
