I like seeing Henry Manoucheri picking this up. It gives me conviction that an investor with 42 years of experience is willing to buy quality real estate at roughly $100+/SF below replacement cost.
The land alone is probably worth $5–7 million, and replacing the structure today is easily a $30 million project, plus three years of construction and no income. Why take development risk when you can buy newer product and start collecting rent on day one?
Going in around a 5.5% cap with the ability to expand to a 6% cap through rent growth and operations seems attractive.
At the end of the day, you're buying below replacement cost with good cash flow on day one. Experienced investors like Henry know that replacing 76,000 SF in Encino today would cost far more than the acquisition price.
Send OMs to David@AtlasBrief.LA