Federal Realty Sold Third Street Promenade Storefronts in Santa Monica for $104M
By Nick Trombola June 18, 2024 2:02 pm
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The times are a-changin’ in Santa Monica, and the buyers of Federal Realty Investment Trust’s parcels on Third Street Promenade are helping to lead the charge.
Federal Realty sold eight parcels, totaling 147,000 square feet of retail and 60,000 square feet of office space, earlier this month to two separate buyers, according to The Real Deal, citing property records. Tech entrepreneur Daniel Negari acquired seven of the parcels — 1202, 1222, 1225, 1232, 1339 and 1344 Third Street Promenade, along with 301 Arizona Avenue — for $84.5 million.
Negari spent north of $22 million for the Arizona Avenue property, or over $900 per square foot, per TRD. Despite a 50 percent vacancy rate, the property is one of the priciest real estate purchases in Santa Monica this year in terms of price per square foot, per TRD.
To fuel the purchases, Negari secured a $61 million loan from the Royal Bank of Canada, per TRD, though other terms of the financing were not made available.
Negari did not immediately respond to a request for comment. The founder of XYZ.com also owns the nearby office at 310 Wilshire Boulevard, which he acquired in 2018 for $9.4 million.
Developer United El Segundo meanwhile purchased the remaining parcel, a 31,000-square-foot building currently occupied by Wally’s Wine at 214 Wilshire Boulevard for $19.5 million.
In other Santa Monica retail news, national shopping center owner Macerich has forfeited the 527,000-square-foot Santa Monica Mall to lender Wells Fargo (WFC) in the wake of defaulting on a $300 million loan tied to the complex.
At the same time, New York-based private equity firm Madison Realty Capital is seeking approval to build a 24-story, mixed-use tower at 601 Colorado Avenue, which, if constructed, would be the tallest building in Santa Monica.
Nick Trombola can be reached at ntrombola@commercialobserver.com.
