Summary:

The Terraces is located in an affluent area of Los Angeles County, California. The property was built into a hillside and had three levels, terraced over each other. It had a good core of tenants including Krikorian Theaters, Blockbuster, Trader Joe's, Pier 1 Imports and El Pollo Loco. The property was 45% vacant at the time of acquisition.

Challenge:

The property was terraced is such a way that there was limited visibility to the 2nd floor and no visibility to the 3rd floor. The 3rd floor was vacant except for the theater and it was not performing well. The center had city restrictions on operating hours that dictated no tenant could be open after midnight.

Solution:

The center needed a new sign program and a facelift and a new tenant mix. All of these posed major challenges since the new tenants would need to be on the 3rd floor primarily. Additionally, the city council would need to be convinced to remove the operating restrictions to allow for re-tenanting. This was all accomplished and Bally's Fitness and Do-It Center Hardware were secured as 3rd floor tenants. Additionally, Kinko's and a bar were secured for vacancies on the second floor.

Results:

The center achieved almost 100% occupancy and stability. Rents were already high so the real opportunity was in increasing the occupancy which was accomplished.