7/27/2023
1 245 S Beverly Dr SOLD
Beverly Hills, CA 90212 Los Angeles
Sale Date Jul 25, 2023
Sale Price Not Disclosed
Actual Cap Rate 4.20%
Parcels 4328-034-008
Comp ID 6462403
Comp Status In Progress
Type 2 Star Office
Year Built 1941
RBA 6,146 SF
Land Acres 0.13 AC
Land SF 5,663 SF
Zoning C3, Beverly Hills
2 8913 W Olympic Blvd SOLD
Beverly Hills, CA 90211 Los Angeles
Sale Date Apr 20, 2023
Sale Price $6,525,000
Price/SF $1,071.78
Parcels 4333-005-019
Comp ID 6369827
Comp Status Research Complete
Type 2 Star Office
Year Built 1955
RBA 6,088 SF
Land Acres 0.14 AC
Land SF 6,001 SF
Zoning C-3T-2
3 9308 Civic Center Dr SOLD
Beverly Hills, CA 90210 Los Angeles
Sale Date Feb 15, 2023
Sale Price $7,700,000
Price/SF $1,474.25
Parcels 4342-013-006
Comp ID 6308878
Comp Status Research Complete
Type 2 Star Office
Year Built 1925; Renov 2001
RBA 5,223 SF
Land Acres 0.10 AC
Land SF 4,356 SF
Zoning M2
4 8840 W Olympic Blvd SOLD
Beverly Hills, CA 90211 Los Angeles
Sale Date Jan 5, 2023
Sale Price $14,500,000
Price/SF $2,077.07
Parcels 4332-012-002
Comp ID 6291498
Comp Status Research Complete
Type 2 Star Office
Year Built 1951; Renov 2014
RBA 6,981 SF
Land Acres 0.28 AC
Land SF 12,280 SF
Zoning C3, Beverly Hills
5 250-256 S La Cienega Blvd SOLD
Beverly Hills, CA 90211 Los Angeles
Sale Date Nov 15, 2022
Sale Price $8,500,000
Price/SF $1,331.04
Parcels 4333-028-017, 4333-028-018
Comp ID 6211984
Comp Status Research Complete
Type 3 Star Office
Year Built 1953; Renov 2015
RBA 6,386 SF
Land Acres 0.25 AC
Land SF 10,890 SF
Zoning BHC305
6 449 S Beverly Dr SOLD
Beverly Hills, CA 90212 Los Angeles
Sale Date Aug 1, 2022
Sale Price $17,500,000
Price/SF $818.68
Parcels 4330-027-002
Comp ID 6109655
Comp Status Research Complete
Type 2 Star Office
Year Built 1954
RBA 21,376 SF
Land Acres 0.38 AC
Land SF 16,553 SF
Zoning C-3T-1
©2023 CoStar Group - Licensed to King's Arch - 471420
The information above has been obtained from sources believed reliable. While we do not doubt
2. Timing
To make adaptive reuse viable, cities must find ways to simplify building codes and expedite permits. Given how thin the margins are for converting office to residential, cities need to streamline the process as much as possible.
3. Lease Expirations
The typical office building has staggered lease expirations. Consequently, a large portion of an adaptive reuse candidate will have to sit vacant until longer term leases expire. Leasing office space on a short-term basis is very difficult to do given market demand for tenant improvements and free rent.
D. Market Changes
A. Increasing net absorption and occupancy of office buildings in Beverly Hills is a strategic imperative to drive economic prosperity and enhance the city's status as a thriving commercial center. The growing demand for premium office spaces in Beverly Hills reflects the magnetism of the city for businesses seeking a prestigious address that exudes success and sophistication. As a result, the city's net absorption rate, currently showing an upward trajectory, is projected to steadily increase and flip to positive within the next 5 years. This surge in net absorption is indicative of a burgeoning business ecosystem, attracting a diverse array of industries and companies to establish their presence in the city. As the office market continues to flourish, the challenge against adaptive reuse of office buildings to multi-family residences becomes evident.
See graph below.
II. Beverly Hills Office to Residential Opportunity
Identifying suitable buildings for adaptive reuse in Beverly Hills requires a meticulous evaluation process to narrow down potential projects from the initial pool of 331 office buildings. The first step involves eliminating properties that are not conducive to residential conversion such as: (i) properties in the Golden Triangle, which are highly sought after for commercial purposes and may not align with the desired residential aesthetics, (ii) medical buildings, which are typically designed with specialized infrastructure, making them less suitable for residential use, (iii) buildings under 3 stories, as these may not offer sufficient space to accommodate multiple residential units on a single floor, making them less practical for conversion, and (iv) buildings that are at least 90% occupied, as the disruption caused by transitioning to residential units could be impractical and may face potential resistance from existing occupants.
After applying these filters, we are left with a more focused group of 20 buildings, totaling 138,000 square feet, which show realistic potential for adaptive reuse as housing projects.
However, this is only the initial step, and further investigation is needed to determine the feasibility of each project. It is essential to analyze the floor plans of these buildings to ascertain whether they can accommodate the necessary elements required for residential living, such as appropriate light, air circulation, and ceiling heights.
III. Benefits
A. Economic Advantages
1. Potential cost savings
Per above, this benefit simply does not apply in Beverly Hills. In markets like Downtown Los Angeles where valuations have tumbled to well below replacement cost, there are potential cost savings associated with adaptive reuse.
3. Time If the city adopts a streamlined process where Adaptive reuse projects are given expedited servicing, and related code is concise, this could be a time saver for developers.
Time is a critical factor in any development project. By adopting an expedited servicing approach and concise, clear codes specifically tailored for adaptive reuse, the city can remove bureaucratic hurdles and reduce the time to obtain approvals and permits. This streamlined process allows developers to move forward with their projects more efficiently, accelerating the timeline from conception to completion.
The shorter development timeline can attract more developers to consider adaptive reuse, knowing that they can swiftly navigate the regulatory landscape and bring their vision to reality in a timely manner.
B. Community Benefits
1. Mixed-Use Benefits
a. Potential positive effects of combined office space with residential or retail components are numerous and can significantly enhance the urban landscape. Mixed-use developments that incorporate office space alongside residential or retail areas create dynamic and vibrant environments that cater to diverse needs. One of the key advantages is the activation of ground floors, which contributes to the much-needed walkability in certain areas of the city. When office spaces coexist with residential or retail establishments, there is a natural synergy that fosters a lively atmosphere throughout the day and evening. This blending of uses encourages foot traffic and pedestrian activity, supporting local businesses and fostering a sense of community.
b. The presence of offices within mixed-use developments can also facilitate a live-work-play lifestyle, reducing the need for long commutes and promoting a healthier work-life balance for employees. This proximity to workplaces encourages residents to explore nearby amenities and cultural attractions, further promoting economic activity in the area. Moreover, the combination of residential and office spaces can lead to a more sustainable environment, as it reduces the dependency on cars and encourages the use of public transportation or active modes of mobility.
2. Increased foot traffic
a. Residential developments would increase foot traffic in the area, which would support local businesses. With residents living near these local establishments, there is a natural inclination for them to patronize nearby businesses regularly. This increased foot traffic can lead to a boost in sales and revenue for local merchants, stimulating economic growth and job opportunities within the community. It may also encourage entrepreneurs to establish new businesses, knowing that there is a growing customer base in the area.
D. Sustainability:
1. Environmental impact
a. The sustainable benefits of adaptive reuse for converting office buildings into residential spaces in Beverly Hills are multi-faceted. First and foremost, by repurposing existing structures instead of demolishing and constructing new ones, the environmental impact associated with new construction materials, resource transportation, and waste generation is significantly reduced. This approach aligns perfectly with Beverly Hills' commitment to sustainable development and responsible land use.
b. Reduced Environmental Footprint: Adaptive reuse reduces the need for new construction materials, thereby lowering the associated carbon emissions, energy consumption, and waste generation. This sustainable practice helps minimize the environmental impact compared to building new residential structures from scratch.
c. Energy Efficiency: Adaptive reuse projects can integrate modern energyefficient technologies and sustainable building practices, resulting in reduced energy consumption for heating, cooling, lighting, and other utilities. This leads to lower operating costs for residents and contributes to overall energy conservation.
Recommendations
As stakeholders with vested interests in the city's development and housing market, we strongly support adaptive reuse as one of the tools in our increase housing bag.
That said, given the limited opportunities to use it, we caution relying too heavily on it as a solution to the housing shortage or gaining approval for the Housing Element.
As a first step, we propose that the city undertakes a comprehensive examination and modernization of its current code pertaining to adaptive reuse. The most important fix is to increase the density allowed in buildings that undergo conversion. Also important is streamlining the permitting process so that it can be done quickly and without complicated forms and rules that necessitate expensive expeditors and lawyers.
A thorough examination of the current code is crucial to ensure that any changes or incentives put forth support responsible and sustainable adaptive reuse practices.
We must strike a balance between encouraging adaptive reuse projects that enhance the community's character and preserve the city’s identity.
It is essential for the city to adopt a comprehensive, forward thinking approach to augment its housing stock effectively. This strategy entails making substantial updates not just to adaptive reuse but to the existing Mixed-Use Ordinance and considering other strategies including allowing height and density transfers and other creative tools. To maximize efficiency, we recommend allocating significant effort towards implementing higher density and height allowances and exploring practical methods to expedite the permitting process uniformly. By doing so, the city can foster a more vibrant and sustainable urban development while addressing our pressing housing demands.
We look forward to your consideration of these recommendations.
Sincerely,
Richard Shamooilian
Founding Member, BHIRD
CAUTION: External Sender
Use caution when clicking links or opening attachments
TO BE READ ALOUD IN ITS ENTIRETY – Not to instead be summarized or referenced merely as a public comment statistic on an agenized item.
Dear Planning Commissioners –
The Municipal League continues to oppose the gradual but inevitable degradation of Beverly Hills through increases in building and population density, which enable a panoply of permanent adverse impacts, and materially benefit real estate interests at the expense of everyone else. While no one expects the Planning Commission to ignore mandates of the State Legislature - however implausibly or contrived they may have been predicated - there is no legitimate basis for intentionally ignoring such identifiable and measurable proximate cause damage.
The only true imperative you have as Commissioners is to fulfill your ethical duty to protect our community from harm, particularly since it is your primary responsibility, within your advisory discretion and when that harm is so conspicuously avoidable.
Thomas White
Chairman
The Municipal League of Beverly Hills
CAUTION: External Sender
Use caution when clicking links or opening attachments
________________________________
Please read this e0mail at the Planning Commission meeting.
On page 5 of the Resolution, under Section 6, second line, “sown” should be “shown” which refers to Exhibit A, a map of General Plan Land Use Designations.
More important, it is not clear whether Exhibit A, a map of General Plan Land Use Designations, is new and if not, how and to what extent it has been modified. Is the question whether the map dated September 20, 2023, should be adopted for the first time? Or is Exhibit A an existing map which is only proposed to be changed by the addition of the following language: “*The maximum density for the Mixed Use Overlay Zone may vary for residential conversion/adaptive reuse projects, but shall not exceed existing building floor area divided by 500 square feet, pursuant to BHMC Section 10-3-1888”? And why should the city disclaim the accuracy of the map as it has done on the map? I would not think that the city is trying to change a General Plan map in any major way without disclosure and explanation, but one must be concerned because this matter has not been properly or adequately explained.
I hope the answer to this question will be explained at your meeting.
Thank you.
Darian Bojeaux