Vons Sells Silverlake/Los Feliz Location to Children's Hospital Los Angeles for $90 Million

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Vons Sells Silverlake/Los Feliz Location to Children's Hospital Los Angeles for $90 Million

Post by CalItalian »

http://labusinessjournal.com/news/2018/ ... pital-90m/

Vons has agreed to a multi-year leaseback of the property and plans to operate the store “for years to come,” said Children’s Hospital spokesman Lorenzo Benet via email.

“There are no immediate plans to change how that property is being used,” Benet said.

The supermarket was built in 1963 and has 120 parking spaces.

It was originally a Safeway and they expanded it at one point prior to Vons purchase of Safeway in the 80's in SoCal.

Sounds like a store that will be demolished in the years ahead once Children's Hospital gets plans approved and money for their expansion.
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Re: Vons Sells Silverlake/Los Feliz Location to Children's Hospital Los Angeles for $90 Million

Post by storewanderer »

Wow, that is some valuable real estate. Another example of Albertsons selling off real estate to raise cash. To be fair I can see how this is attractive because they can take that $90 million and go build 9 big brand new stores elsewhere with it.

I wonder what the lease is going to be going forward and if it will even be profitable to operate a store on that lot if the lease is too high. On a property that cost that much, it has to be a ton.
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Re: Vons Sells Silverlake/Los Feliz Location to Children's Hospital Los Angeles for $90 Million

Post by rwsandiego »

storewanderer wrote: September 28th, 2018, 11:51 pm Wow, that is some valuable real estate. Another example of Albertsons selling off real estate to raise cash. To be fair I can see how this is attractive because they can take that $90 million and go build 9 big brand new stores elsewhere with it.

I wonder what the lease is going to be going forward and if it will even be profitable to operate a store on that lot if the lease is too high. On a property that cost that much, it has to be a ton.
My guess is the lease won't be too high because Children's Hospital is a not-for-profit (no property taxes) and wants the income stream that a stable tenant (like a popular VONS supermarket) generates. In addition to $90 million for Albertsons, they benefit from having the ability to operate a new store that will occupy the mixed-use development that will inevitably be built.
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Re: Vons Sells Silverlake/Los Feliz Location to Children's Hospital Los Angeles for $90 Million

Post by klkla »

For a price tag of $90 million they have to have other plans for the property. There's no way the lease from a free standing supermarket would even come close to acheiving a satisfactory return on investment. They would need a minimum $250,000 a month in rent from Vons for 30 years just to get the $90 million back. Sales volume at the store is good but not good enough to cover that kind of rent.

My guess would be they plan to either 1) eventually expand the hospital there or 2) build a multi-use development that includes more space for the hospital, retail and/or housing.

Also, don't forget there is an Albertson's just nine blocks north of this location so if Vons does eventually close they will still have a store in the area.
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Re: Vons Sells Silverlake/Los Feliz Location to Children's Hospital Los Angeles for $90 Million

Post by pseudo3d »

klkla wrote: September 29th, 2018, 2:53 pm For a price tag of $90 million they have to have other plans for the property. There's no way the lease from a free standing supermarket would even come close to acheiving a satisfactory return on investment. They would need a minimum $250,000 a month in rent from Vons for 30 years just to get the $90 million back. Sales volume at the store is good but not good enough to cover that kind of rent.

My guess would be they plan to either 1) eventually expand the hospital there or 2) build a multi-use development that includes more space for the hospital, retail and/or housing.

Also, don't forget there is an Albertson's just nine blocks north of this location so if Vons does eventually close they will still have a store in the area.
The Albertsons store to the north is pretty small on a tight lot. It looks like it was a Lucky. I think that Albertsons wants to keep the Vons alive as long as they reasonably can, though, otherwise they would've closed it in a hurry. The $90 million price tag probably is worth it as it essentially locks in the land value without having it go up further in the future, and keeps it open for future development, even if the return on investment is pretty poor.
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Re: Vons Sells Silverlake/Los Feliz Location to Children's Hospital Los Angeles for $90 Million

Post by klkla »

pseudo3d wrote: September 30th, 2018, 11:17 pm The Albertsons store to the north is pretty small on a tight lot. It looks like it was a Lucky. I think that Albertsons wants to keep the Vons alive as long as they reasonably can, though, otherwise they would've closed it in a hurry. The $90 million price tag probably is worth it as it essentially locks in the land value without having it go up further in the future, and keeps it open for future development, even if the return on investment is pretty poor.
Albertson's is bigger than it looks. I would guesstimate it at around 35,000 sq. ft. The aisles are very long which distorts how big it appears. According to the article the Vons is 43,500 sq. ft. The big difference is demographics. The neightborhood gets progressively wealthier to the north of that Vons and progressively poorer to the South.

For comparision this is the neighborhood 12 blocks north of Vons:
https://www.google.com/maps/@34.1142101 ... 384!8i8192

This is the neighborhood 12 blocks south of Vons:
https://www.google.com/maps/@34.0818226 ... 312!8i6656

Albertson's is also the only supermarket in the wealthy Los Feliz neighborhood. The Vons is actually in Hollywood.

The store was originally a Food King, then Smith's Food King, then Lucky and finally Albertson's.

The reason they aren't 'closing it in a hurry' is because they want it to have some income until they can develop the land. It will take years to get anything approved in that neighborhood. Go twelve blocks to the west and you will see this eyesore:

https://www.google.com/maps/@34.0981816 ... 384!8i8192

That is a Target that was in the process of being constructed when a neighborhood association lawsuit was able to have construction halted because the building height was a few feet higher than it was zoned for. It has looked like this for years.

Then, go six blocks further and you will see this:

https://www.google.com/maps/@34.0980158 ... 384!8i8192

This is a beautiful fully completed high-rise apartment building that has sat vacant for years because of another neighborhood association lawsuit.
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Re: Vons Sells Silverlake/Los Feliz Location to Children's Hospital Los Angeles for $90 Million

Post by CalItalian »

The Vons is NOT in Hollywood. Hollywood is west of the 101. Hollywood Blvd. STARTS in front of the Vons breaking off from Sunset. That is where Los Feliz and Silverlake start. Little Armenia/East Hollywood is to the west of the Vons.
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Re: Vons Sells Silverlake/Los Feliz Location to Children's Hospital Los Angeles for $90 Million

Post by CalItalian »

This is not a poor area in the least. Silverlake has some of the highest rents in Los Angeles and homes are well over $1 million average. They have virtually pushed out most of the Latinos and gays from the Silverlake area which use to have dozens of gay businesses and bars and have been replaced with hipster bars and businesses. Only 2 gay bars remain.
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Re: Vons Sells Silverlake/Los Feliz Location to Children's Hospital Los Angeles for $90 Million

Post by klkla »

CalItalian wrote: October 1st, 2018, 10:23 pm The Vons is NOT in Hollywood. Hollywood is west of the 101. Hollywood Blvd. STARTS in front of the Vons breaking off from Sunset. That is where Los Feliz and Silverlake start. Little Armenia/East Hollywood is to the west of the Vons.
Actually you are wrong. It is in Hollywood:
Screen Shot 2018-10-02 at 12.23.13 PM.png
Close up:
Screen Shot 2018-10-02 at 12.29.55 PM.png
There was actually a controversy when the store was remodeled and the neighborhood association even required that they put 'Hollywood' on the sign outside:

https://www.google.com/maps/place/Vons/ ... 118.287983
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Re: Vons Sells Silverlake/Los Feliz Location to Children's Hospital Los Angeles for $90 Million

Post by CalItalian »

Additional story. Between Children's Hospital and the Church of Scientology, they've bought up most of the large properties in the Silverlake/Los Feliz area. I didn't know Children's Hospital owned the former Circuit City and Acapulco restaurant properties. https://www.theeastsiderla.com/2018/10/ ... re-growth/
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