Benjamin Soleimani, dubbed the “Mayor of Melrose” for his prodigious efforts to turn the part of Melrose Avenue west of La Cienega into a version of an English town’s “high street,” has paid what some brokers are calling a stunning price for 8632 Melrose Ave.
That price is $4,507 per square foot, 60% more than the then-amazing $2,815 per square foot that real estate investor Jerry Illoulian paid for the former Tommy Hilfiger store on the southwest corner of Robertson and Beverly boulevards in 2015. That now is the location of the Michael Aram store. It is expected that Illoulian eventually will raze the one-story building at that prime location and build a taller one.
That 8632 Melrose property is on the south side of Melrose between Huntley Drive and Norwich Drive. The building on the site formerly housed a showroom for Murray’s Iron Works, a company that makes and sells iron furniture.
The Soleimani purchase, which totaled $15 million, was first announced in the Real Deal, a trade publication. The Real Deal quoted a real estate broker not involved in the transaction as saying the per-square-foot price was “a ridiculous number for a sale like that.”
However Carter Magnin of Cushman and Wakefield said “the price tag is only ridiculous at a surface level.”
“Average asking rent in [the West Melrose area] is about $240 per square foot right now, so when you extrapolate over 10, 20 years, the price isn’t far off. And most landlords here are long-term holders.”
Magnin also noted that that area of Melrose has attracted a number of hip and stylish merchants such as Rag & Bone.
Soleimani owns a number of other properties on Melrose, including 8564 Melrose, the site of Restoration Hardware’s California flagship store. Soleimani’s BMB Investments fought a long battle to get the Restoration Hardware project approved over objections from residents of the adjacent West Hollywood West neighborhood.
The conflict was largely over whether Restoration Hardware was in fact a “wholesale” business, where products are not sold to the average customer and little traffic is generated. The city considered Restoration Hardware a wholesale business since designers who have items shipped are its primary customers; only 3% of Restoration’s sales are “cash and carry.” However, Meister, who served on the city’s Planning Commission from 2011-2012, points out that Restoration has a retail business license, charges sales tax and is listed on the stock exchange as a retail business. When questioned by the Planning Commission in August, DeMonty Price, Restoration’s vice president of retail stores, avoided the question by calling it a “hybrid” of retail and wholesale.
“It’s wholesale with incidental retail,” Councilmember John Heilman said.
But neighborhood activist Lauren Meister, who now is WeHo’s mayor, argued that Restoration was a 100% retail business, and thus an environmental review was needed to study traffic, noise and other potential impacts. The City Council denied an appeal of an earlier approval of the project in a 3 to 2 vote.
240,000.00 per month is a mistake. It should be for the entire year.
That was “re-produce zillions of an item” now in the public domain not subject to royalties.
I actually think there is a little confusion here as far as price per square foot. I’m pretty sure it is $240 a square foot per year. Here in L.A. Commercial space is priced per square foot a month, where as in most parts in the country it is priced per year. So the actual price per square foot is really $20 a month. That is stiil exorbitantly high. So a 1000 sq ft space would be $20,000 a month.
@Mark: Heilman is not lining his pockets with cash. Landlords are when tenants default on leases. There will always be another $240,000/mo corporate sucker that just can’t live without Melrose. Here’s how “top designer” can afford a $240,000 mo. Melrose lease. They manufacture an eponymous line of furniture. Client buys a $200,000 stylish dining room table which looks chic as ever with its brilliant veneer. The veneer covers a well crafted compressed sawdust shape. If you think little wood carvers actually make that piece you would be wrong. When showroom or various sites then advertise a piece at 50% then… Read more »
$240sf is beyond ridiculous for Melrose. Even large chain retailers are not going to find it profitable to operate at that price point. What’s going to happen is stores will come and stores will go. The foot traffic and lack of parking will never justify such an outrageous amount of money. It’s sheer stupidity and very short sighted to think this will continue. Council members like Heilman are idiots and obviously know nothing about business or retail. He’s probably just lining his pockets with cash.
Strangely, what formerly was Melrose, a unique and varied collection of shops, showrooms and retail is exactly what ‘High Street” IS in the UK. What kind of glasses does Mr. Soleimani wear? Perhaps the ones with reflective lenses that mirror back to him his own myopic image? There were ways for a thoughtful developer to have presented a plan detailing a true vision of Melrose by retaining the store fronts and increasing the square footage through massing behind& scaling up and by preserving the warren of brick paths winding around. That is known as vision and creativity, which is exactly… Read more »
I’ve been in Restoration Hardware. The cost of items are very visible and apparent. It may sell wholesale but, to me, it is a most definite retail business. Heilman’s characterization is laughable. Yes, the bubble continues to expand. Many learned economists have concluded that, as previously stated, it’s just a question of when not if. And I hope I’m around when it bursts to witness the, hopefully, excruciating financial pain inflicted on the greedy.
Clever and insightful comments above. Living in West Hollywood for nearly 29 years, I have seen a lot of changes. What is happening to Melrose West of La Cienega needs to be controlled. Sam has created a vacant corridor at night. ONLY Urth is open and attracts the pedistrian traffic that once fulled this area when their were quite cottages with interesting local merchants, small tea shops and other reasons to stroll the neighborhood at night. What is happening in WHW (to its lovely streetscapes) is a tragity of the times and greed. I just hope that with the new… Read more »
@Carla… no, not a seller. I walk the various streets in my neighborhood with my dogs and watch the houses go up for sale and how much they sell for. Then I watch them being torn down to be replaced with something truly out-of-scale and awful. It will be a few more years before I think about selling. Where would I go? I still need to live in LA for family reasons. All I’d be doing is increasing my property taxes if I sold and repurchased. I’ll wait for the next bubble after the coming recession.
I smell a seller! Mr. Bianco you are looking for a buyer who will pay more than a million dollars for your tear down. You might get!
Aside from price what Ben Soleimani gives back to the community is uninspiring architecture that is often mentioned as being offensive to the design community itself. Instead of” High Street” it should be referred to as “Bland Street”. Even the Brits are offended. Driving down Huntley recently in the early evening, turning west on Melrose, I was struck by the hulking out of place former Bodhi Tree site and a boulevard devoid of human sensibility. A WeHo souk filled with expensive overpriced (by at least 70%) baubles in every form. How else does one think that $240,000/mo rent can be… Read more »
Nice that this kind of money is flying around West Hollywood, but what it really means is that almost any business but the most high end stores/restaurants will be tenants. You know, when your 1,000 square foot retail store pays $240,000 in monthly rent, you have to be pumping through a lot of sales to make that kind of rent make sense. Only very wealthy people will be shopping here and it’s hard to not envison a point where most people are priced out of living in West Hollywood. Already, tear downs in WHW are $1 million or more. Perhaps… Read more »