Brothers Mark and Arman Gabay, who own the development firm Charles Company, purchased an office and industrial property in the San Gabriel Valley for $26 million in an off-market deal that closed Thursday, The Real Deal has learned.
The buyers paid just over $100 a square foot for the 247,000-square-foot building at 9320 Telstar Avenue in El Monte to the sellers, a partnership between Kennedy Wilson Properties and Fairfax Financial Holdings, according to CoStar.
The property appears to have been sold at a loss. Kennedy Wilson purchased the building in 2011 from Jamison Properties for $33.3 million, according to CoStar. It’s not the first loss, either: Jamison acquired the building for $45 million in 2007.
Andrew Levant of Kennedy Wilson represented the sellers. John Carroll of Giltner Realty repped the buyer.
The sale price, which comes out to little more than $105 per square foot, is below the average going rate for office property in El Monte, which is $126 per square foot, according to CoStar.
The building is fully leased, with Los Angeles County Health Services as its anchor tenant, according to CoStar. About 68,000 square feet of the remaining space is leased to an apparel company, Vibes Base Enterprise, that uses it for storage and distribution. The tenants have more than two years left on their leases and do not yet have plans to move, said a source close to the deal.
The Gabay brothers’ Charles Company owns a range existing and ground-up development properties in Los Angeles, from retail centers to mixed-use projects to restaurants. It is planning a $500 million remodel of its Hawthorne Plaza mall, which would include 600 residential units and offices.
The Gabays, who could not be immediately reached for comment, have been the target of criticism over their campaign contributions in areas where they have proposed developments. Arman Gabay, for example, donated about $50,000 through his companies to the 2011 campaign of former Hawthorne Mayor Danny Juarez, the Daily Breeze reported.
Mark Gabay recently purchased the Hannah Carter Japanese Garden garden and adjacent residence in Bel Air from UCLA for $12.5 million, raising some neighborhood concerns about whether it would be maintained “in perpetuity” as Carter’s heirs had wished.