A shovel-ready development site in Silver Lake has changed hands for $3.5 million.
The double lot at 627-631 N. Dillon Street is vacant and entitled for a 30-unit apartment building, according to the Los Angeles Business Journal.
The property was sold by 627 Dillon Associates and Galaxy Commercial Holdings to MDT Properties, which can break ground on the development after securing permits from the city of Los Angeles.
The site is within walking distance of Silver Lake Boulevard, a north-south thoroughfare that cuts through the neighborhood.
Developers sell shovel-ready sites for a number of reasons. Sometimes the entitlement process is delayed and throws off their timeline, so they unload it to mitigate risk.
Some firms buy and entitle properties with the intent to sell it as a shovel-ready property. There is strong demand for entitled properties in L.A. because the process can be expensive and take years.
To avoid the hassle and uncertainty, buyers often pay a premium for entitled properties. The most common are properties entitled for multifamily projects in neighborhoods where real estate speculators are active, such as Koreatown and Silver Lake.
Last year, a local developer in Koreatown got $20.3 million for a property there entitled for a 252-unit apartment building.
Commercial sites ready for permitting also pop up on the market from time to time. Skanska in 2019 bought a property in Beverly Hills entitled for an office development and broke ground three months ago. [LABJ] — Dennis Lynch