In what could be the largest commercial real estate transaction of the year in Los Angeles County, Los Angeles World Airports is negotiating to acquire a 21-acre parking lot on the east edge of LAX, brokers said Tuesday.
It is being offered for sale by AMB Properties Corp., a San Francisco industrial landlord that has owned the lot called Park One since 2002.
The potential sale price is confidential, but "several purchasers have indicated interest in buying the property at prices well in excess of $100 million," said broker David Hasbrouck, an executive vice president at Cushman & Wakefield who represents AMB Properties. "Our goal is to finalize the deal over the next several weeks," he said.
Los Angeles World Airports declined to comment on the potential sale, but the public agency is likely to operate the property next to Terminal 1 as a parking facility for the foreseeable future, Hasbrouck said.
With investment financing hard to come by since the national credit crunch began, large transactions have been rare in Southern California for almost a year. The largest sale in Los Angeles County in 2008 was the $275-million purchase of Citibank Center, a 48-story downtown Los Angeles skyscraper, according to Cushman & Wakefield.
But with many office, retail and industrial tenants having difficulty paying their rents in this recessionary economy, parking lots may be among the least risky investments. Park One, which is adjacent to the Southwest Airlines terminal, is a cash cow, industry observers said.
"It's one of the best private off-airport facilities in the nation because of its proximity to a large commuter airline terminal," said broker Richard Plummer, who also represents the seller.
Exact revenue figures are confidential, the brokers said, but the lot at the northwest corner of Sepulveda and Century boulevards has 2,720 parking spaces rented at rates starting at about $15 a day and is believed to generate profits of millions of dollars annually.
The lot has an assessed value of more than $83 million, according to public records.
Los Angeles World Airports spokeswoman Nancy Castles declined to confirm that the agency plans to buy Park One. Purchases over $150,000 must be approved by the agency's board of commissioners and the Los Angeles City Council.
The agency has multibillion-dollar plans to upgrade facilities at Los Angeles International Airport, she said, but the Park One site is not included in any designs for that work.
The lot was formerly home to one of the region's premier military contractors, Garrett Airesearch, which made airplane engines, turbochargers and other aerospace products.
The Times reported in 1941 that then Airesearch Manufacturing Co. had moved into its new "ultramodern structure of steel and concrete" at Sepulveda and Century. The company went on to make several products for World War II airplanes there, including cabin pressure systems for bombers.
The site was converted to a parking lot in the early 1990s.