Distressed Encino Office Starts Conversion to Affordable Housing
A 74,947-square-foot office building at 5435-5445 Balboa Boulevard in Encino, California, has been sold to Elysian Housing and Capstone Equities for $20.64 million, setting it up for a conversion to affordable housing.
Construction is underway on the asset, which will be rebranded as The Oaks on Balboa, and will include 117 studio and one-bedroom apartments. It is expected to be completed in 18 months.
Lee & Associates’ LA North/Ventura office represented the entity of the seller, 5435 BALBOA LLC, led by Darren Casamassima, principal and Scott Romick, principal/managing director.
The asset is in the residential and commercial heart of the San Fernando Valley area along the US 101 Freeway, with abundant retail, restaurants, schools and parks nearby.
“While many assume that distressed office properties are ideal candidates for conversion to affordable housing, the reality is quite different,” Romick told GlobeSt.com.
“Most lack the proper layout and dimensions for an efficient conversion. Fortunately, this property offered ideal conditions — including a mostly vacant building with short-term leases, optimal bay depths, and an excellent window-to-square-foot ratio to ensure the necessary level of natural light.”
Casamassima told GlobeSt.com the demand for affordable housing in Los Angeles continues to grow for several key reasons.
“It helps alleviate the burden of rising rental costs—particularly for lower-income households—thereby playing a critical role in reducing homelessness,” he said.
“Affordable housing developments also boost the local economy and enhance the overall quality of life for residents through new, well-planned construction with amenities. Additionally, local and state governments have been actively promoting affordable housing, in part as a response to the housing shortages caused by the devastating wildfires in recent years.”
Source: GlobeSt/ALM