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Commercial Real Estate

Red Sea Group Buys West Valley Building

Warner Center office structure is added to the Israeli firm's growing portfolio of Southland properties.

September 03, 2002|BRAD BERTON | SPECIAL TO THE TIMES

Red Sea Group of Israel has acquired another commercial property as part of its plan to build a Southern California real estate portfolio of $350 million or more.

Its latest purchase is a 101,000-square-foot office building in Warner Center housing the headquarters of Wella Corp. USA, a subsidiary of German personal care products maker Wella.

The seller of the two-story building at 6109 DeSoto Ave. in Woodland Hills was a group of individual investors that received about $22 million for the property, said Red Sea Vice President Mitch Kralis.

Wella Corp. USA relocated its headquarters from New Jersey to the Warner Center building in early 2001. Wella's lease of the entire property--which includes a training salon and a small store--runs for another eight years, Kralis said.

Red Sea's first Southern California purchase was another property entirely leased to a single tenant: AT&T Corp.'s 288,000-square-foot data center complex in Hawthorne. The Dallas-based U.S. Red Sea unit is thought to have paid about $43 million in March for that facility.

The Aug. 24 Warner Center deal was arranged by brokers Jeffrey Goodfriend of Lee & Associates, and Alan Levy and David Meir of RE/MAX. Teachers Insurance & Annuity Assn. provided mortgage financing.

Red Sea intends to buy $350 million to $500 million worth of Los Angeles-area income properties within the next two years, said Kralis, adding that Red Sea is bullish on Warner Center's long-term future as the commercial hub of the western San Fernando Valley.

Warner Center has seen some substantial real estate trades this year, even though commercial real estate investment activity in Southern California in general is down.

An office and warehouse building a block away from Wella occupied by movie-equipment maker Panavision was sold recently, reportedly for $14 million. Investors also have agreed to purchase nearby Warner Center Business Park for an estimated $55 million, as well as the district's signature Warner Center Plaza high-rise towers for nearly $340 million.

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