Pine Avenue changes coming
Sales in the works may boost retail on entertainment-laden thoroughfare
By Don Jergler, Staff
LONG BEACH A wave of property transactions on Pine Avenue may give rise to several changes on the street, including higher lease rates, more retailers and a possible ban on new bars.
Six Pine Avenue properties are up for sale or have recently sold:
Woodland Hills-based Adler Realty Investments Inc. announced in August its purchase of 100 W. Broadway, a six-story building best known as home of King's Fish House at Pine and Broadway.
Earlier this month, a private investor announced the purchase of a property at Third Street and Pine Avenue for a reported $2.9 million, and said he may bring more food sellers to the corner. The 10,000-square-foot parcel at 247-257 Pine Ave. houses A & M Deli, Universal Jewelers, Koru Spa Salon, Tape & Record Room and Omelette Inn.
Ries Realty has put up for sale its 200 Pine Ave. property, home to Aladdin, Wasabi and an office building, and its 115 Pine property, which houses Alegria and L'Opera.
Pine Square, the location of an AMC theater and various food and goods sellers, and apartment units, has been listed for sale. Its owners already have secured city approval to convert the apartments to condominiums.
Property at Pine and Third Street that houses now-closed Express and Bath & Body Works, as well as Starbucks and Crown Books, has been on the market, and sources familiar with the property say it has been sold.
"When you see all of this activity happening it does signal major change," said Becky Blair with Blair Commercial Real Estate. "Rents will increase, because people will be paying record prices for these properties. Higher-end tenants will have to come here."
The sales come at a time when experts see the real estate cycle ending, and commercial development is usually the last to see increased prices and leasing activity.
"We may be at the end of this real estate boom," Blair said. "And the sellers are anticipating that they are taking the money and running or they are holding."
Ted Ries, president of Ries Realty, a privately held Beverly Hills company that owns both 115 and 200 Pine, said the company wasn't planning to sell the properties when they purchased them around 1997.
However, prices right now just look too good, he said.
"There's been such a run-up in price that given the equity that's trapped in those buildings now, selling makes sense," Ries said.
The Pine properties both approximately 70,000 square feet are going on the market unpriced.
The company is selling off all is existing assets which includes an 800,000-square-foot commercial portfolio in high-profile areas like Pasadena, downtown Los Angeles, and Beverly Hills and reinvesting in replacement properties in secondary markets.
"We're looking at really almost anywhere in the U.S. at this time," Ries said. "I know it gives us the opportunity to realize some nice gains for our investments and free up a substantial amount of equity."
Pine Square property owner Meruelo Enterprises has put out a listing for the 245 Pine Ave. property, but the company is not currently in negotiations to sell, said Meruelo representative Armando Delgado.
"We haven't sold anything and nothing's been discussed," Delgado said.
Meruelo successfully lobbied the city more than a year ago for approval to convert the apartments to condos, but no further action has been taken on the property.
To undertake the conversion, Meruelo would be required to pay off a Redevelopment Agency bond issued in 1993 for $13.6 million, said RDA staff member Jae Von Klug. The final payment isn't due until 2023, but the company could pay off the bond now at a cost of $12 million, she said.
A collection of buildings on the east side of Pine near the corner of Third Street that houses now-closed Express and Bath & Body Works, as well as Starbucks and Crown Books, may have been sold, sources familiar with the properties say.
The property was put up for sale following the dissolution of the partnership and massive real estate portfolio of Barry Beitler and Jeff Katofsky last year.
Neither partner could be reached for comment, and name of the new owner of the property has not yet been made public.
The property may be a centerpiece in a retail recruitment plan being put together by the city and the Downtown Long Beach Associates.
The closure of Express and Bath & Body Works took two important retailers away from Pine's already scant retail offerings. Pine businesses have been calling for more retailers on the street to bring in and keep visitors there.
Details of the recruitment efforts are due to be unveiled to the City Council in coming months, but sources familiar with the plan say it will involve a shift away from Pine's entertainment focus there are more than a dozen bars and clubs on the street.
Several business owners on Pine have been calling for a moratorium on alcohol and entertainment establishments.
Robert Swayze, the city's Economic Development Bureau manager, declined to discuss the plan until the council has a chance to see it, and he would only say that "we're upbeat about what's going to happen with retail on Pine Avenue."
Word is that The Madison owner Terry Antonelli, who also owns L'Opera, is seeking to purchase both 101 Pine and 110 Pine so he can own the buildings that house his restaurants.
Antonelli, who has already invested several million dollars to upgrade the buildings, said it is too early to discuss a deal for either building.
"We're in negotiations for 115 Pine," he said.
As for 101 Pine Ave., The Madison building, he added, "I may be working on something on that, but it's too early to talk about."
Ronni Gould, with property manager Ensemble Real Estate Services, would only say that 101 Pine is not currently on the market.
"We're not selling anything now," Gould said.
Real estate experts say any transformation on Pine may not be immediately apparent, but when lease rates start going up, many smaller operations may be replaced with larger, more well-known tenants.
"It's absolutely the best that can happen for Pine," Blair said, adding, "unfortunately it may crowd out some of the smaller retail tenants."
Raymond Goucher and Tape & Record Room partner Randy Lee Joseph may be among those forced out if rents go up.
The buyer of the Third and Pine property may plan to increase rents to meet market rates as well as bring in some new tenants to help revitalize the corner, said broker Geoff Tranchina of Irvine-based Sperry Van Ness.
There was no definitive information on which, if any, of the tenants may be forced to leave.
Universal Jewelers has several years left on a long-term lease, however Goucher and Joseph could be short-timers if they are forced to pay more for the space, Goucher said.
They currently pay $3,100 for 3,100 square feet, about half the average lease price of other storefronts in the area.
But the store does just enough business to pay the bills, Goucher said, adding, "We're practically down to the bare bones."
The store has been on the spot for more than 13 years, and has been operating in downtown Long Beach for 33 years, he said.
It won't just be higher lease rates that will bring in large retailers. Blair believes the city's changing demographics, due to upscale residential development, will make Pine more attractive to retailers.
By 2010, it's estimated that more than 5,200 housing units will have been added to the area and the population will have increased by more than 10,000. The average annual income for the downtown area in 2004 was estimated at a little more than $33,000. Adding the nearly 800-plus new upscale units in downtown that have recently been occupied, the average rises to just over $37,000, according to estimates from the DLBA.
By 2010, the average household income in downtown is expected to reach $52,000, DLBA estimates show.
"The Orange County market has tightened up so much and the price per square foot is so high and the same with the attractive areas of L.A., and Long Beach is in the center and people are really seeing Long Beach as a very, very good place to invest," Blair said. "I think that investors are looking for opportunities, and I think that Long Beach has always been an opportunity, probably never so much as this period in time."
Don Jergler can be reached at
don.jergler@presstelegram.com (562) 499-1281.
Prev
Linear Mode
