Kennedy Wilson Brokerage represented the seller in the disposition of 6000 Reseda Blvd., a two-building, multi-tenant shopping center known as “Alley in the Valley.” Occupying a 1.6-acre lot near the intersection of Reseda Blvd. and Oxnard St. in the Tarzana neighborhood of the San Fernando Valley, the property is across the street from the Reseda Station of the Metro G Line (Orange) rapid bus route, which connects from the terminus of the B Line (Red) rail in North Hollywood to Chatsworth’s regional Amtrak/Metrolink transit center.
Strategy & Results
By virtue of its zoning and transit-oriented location, the property was originally marketed for its enticing development potential. Unexpectedly during the sale process, Metro reorganized its schedule and decreased the frequency of the neighboring bus route. This resulted in a change to the property’s TOC (Transit Oriented Communities) designation from Tier 3 to Tier 2, reducing the allowable density and making it less attractive to developers. Retaining the existing structure as strictly an investment property then presented a new challenge for attracting buyers given the property’s short-term leases—most of which were on a month-to-month basis.
Kennedy Wilson Brokerage navigated through multiple challenges to creatively meet the evolving needs of the client, all while securing an extremely favorable cap rate to the seller during the COVID-19 pandemic. The team structured a deal with a local investor who not only understood the submarket but also recognized the opportunity to increase returns by converting the short-term leases to market rental rates over time. The transaction ultimately closed within just four months for $10 million at a cap rate of 4.1% on existing income.