Regal Ventures, a real estate investment firm headquartered in New York City, has acquired 8500 Sunset Boulevard, a 37,900-square-foot retail condo and 178-space parking garage in West Hollywood, California.
The property’s retail component is 100-percent occupied by a diversified roster of five tenants: the flagship store of Fred Segal, an American clothing and accessories retail brand; Kith, a New York-based retailer offering premium apparel and footwear; Rumble, a boutique boxing fitness chain; Tesse, a Bill Chait-branded restaurant and wine lounge; and Tia, a female-focused healthcare company.
The purchase price and the identity of the seller were not disclosed.
Located in the heart of Los Angeles’s Sunset Strip, the asset sits at the base of one of the city’s most widely known residential communities, the 190-unit, ultra-luxury AKA West Hollywood.
The property is surrounded by one of Los Angeles’ most affluent and highly populated neighborhoods, with more than 786,000 residents living within a five-mile radius.
Regal Ventures, which invests across multiple asset classes, has recently centered its investment focus on retail. The urban and infill retail platform focuses on a middle-market strategy in targeted MSAs and core-plus through opportunistic return profiles.
“Our analysis indicates that retail is positioned to be a big winner through the next cycle as it will continue to benefit from strong market fundamentals,” said Alex Smith, the firm’s co-founder and managing partner in a statement. “While tenant demand remains strong, supply will remain constrained as new construction remains low due to higher interest rates and building costs. We feel it’s an opportune time to be acquiring retail assets in this category.”
“The capital pursuing this sector has continued to pale in comparison to other fundamentally strong asset classes,” said Sean Dainese, managing partner of Regal Ventures. “This lack of capital has been accretive to cap rates and has created an opportunity to purchase retail assets at valuations allowing for positive leverage. This stands in contrast to dynamics playing out in other asset classes.”
“The acquisition of 8500 Sunset Boulevard fits squarely within Regal Ventures’ focus on urban and infill retail in well-located, densely populated locations,” said Joey Cohen, co-founder and managing partner of Regal Ventures. “Sunset Boulevard is a mecca for high-end restaurants, world-class entertainment venues, and internationally recognized retail brands.”
One of Regal Ventures’s larger equity partners in this transaction is Kingbird Investment Management.
Spencer Hoffman of Preti Flaherty provided legal representation for Regal Ventures on this acquisition.
