Westwood buying spree includes home of Erotic shop. (Real Estate).

THE Westwood Village investment frenzy has affected even the most dubious of properties.

The 7,400-square-foot building at 1035-1045 Gayley Ave. has been sold by longtime owner Christine Scharf Trust to Only A Fleshwound LLC, a principal of which is Jeff Katosfky, chief operating officer at Beitler Commercial Realty Services.

The building, which sold for $2.1 million at the end of October, is best known for Zone d'Erotica, the sex shop that opened on the building's ground floor in February. A production company leases the second floor offices on a month-to-month basis.

The deal is the latest in a series of transactions that have seen 400,000 square feet change hands in Westwood in the past few months, Billionaire investor John Anderson is in escrow to buy 10 buildings totaling 160,000 square feet from a group led by Madison Marquette, and Madison sold the 212,000-square-foot Westwood Marketplace from its own portfolio in August.

Meanwhile, Kam Hekmat, who owns the 23-story Center West building on Wilshire Boulevard, bought the 8,400-square-foot Flax Art Supplies building in August for $3.5 million, according to real estate sources.

The Flax family had proposed a four-story mixed-use project consisting of 29 apartments and ground floor retail to the Westwood Design Review Board last December (which opposed it) before putting the property on the market in March. The building has been empty since the art supply store was relocated to Gayley Avenue.

The activity is a combination of sellers looking to take profits and low interest rate-fueled buyers willing to pay for a lower capitalization rate -- and a low-risk investment -- rather than a quick turnaround, according to David Thurman, senior vice president at Grubb & Ellis Co.

"Westwood may have its ups and downs over the years but in the long term, it's a great place to put your money," said Thurman. "People don't have to double their money in a year. They know over time that this area is going to improve."

Even with a sex shop at the western edge of the Village. Despite opposition from neighborhood groups, and 5th District Councilman Jack Weiss, Zone d'Erotica has remained open by limiting adult videos and "novelty" items to 20 percent of its inventory (the remainder made up of clothing items like lingerie), according to Dwight Everest, senior associate of NAI Capital Commercial.

"They've had many meetings with people from the city," said Everest, who represented the seller (and also represented Zone d'Erotica when it signed its lease). "They're complying with all of the rules and regulations."

Beitler's Suzanne Laff represented the buyer.

By Any Other Name

A Denver-based investor is counting on a future bloom for West L.A.'s Teleflora Plaza.

Alliance Community Property bought the five-building, 149,000-square-foot complex at 12233 Olympic Blvd. for $21.8 million and will be spending an additional $7 million to $10 million on rehabbing the 22-year-old project in the next 12 months.

The seller, Des Moines, Iowa-based Principal Financial Group, was the initial lender on the development until foreclosing on it in the mid-'90s. Rents at the property, which is 30 percent vacant, range from $2.15 to $2.35 a foot. By comparison, the asking rate for Class-A West L.A. space during the third quarter was $2.34 a foot, according to Grubb & Ellis.

"It's historically been an entertainment tenant building," said Bob Safai, president of Madison Partners, who, with Madison's Lynwood Fields, represented both sides of the deal. "But they're going to market itto all professions."

Unilab Reunion

Unilab Corp. is combining its seven West Valley facilities into a 160,000-square-foot West Hills building, having inked a 15-year deal at 8401 Fallbrook Ave. The laboratory services company will be moving into the building, which once housed Coast Federal Bank, next year.

The value of the deal was not disclosed, but Valley real estate sources estimated it at between $60 million and $65 million, making it one of the largest lease deals in the county this year.

The Fallbrook Avenue building is part of the 1 million-square-foot Corporate Pointe at West Hills campus that was once the site of a Hughes Aircraft plant.

Grubb & Ellis' Jim Lindvall and Dan Sanchez represented the tenant on the deal while the landlord, Multi-Employer Property Trust, was represented by Kevin Housman, who was with Trammell Crow Co. at the time of the deal late last month but has since moved to Douglas Emmett Realty Advisors.

Age Before Beauty

L.A.-based Rexford Industrial LLC is continuing its buying spree of older San Gabriel Valley industrial buildings with the purchase of an 11.5-acre site, which includes a 147,000-square-foot building, at 15251 Don Julian Road in City of Industry.

The company, whose financial backers include Richard Ziman and Victor Coleman, chairman and president of REIT Arden Realty Inc. respectively (but not the REIT), bought the property for $6.3 million and plans on investing another $7.5 million on upgrades and later building another 92,000-square-foot structure.

Rexford, which purchased a 117,000-square-foot Industry building in June and is in escrow for another 100,000-square-foot building in the San Gabriel Valley, bought the Don Julian site out of the bankruptcy of solar panel producer Tecstar Power Systems Inc. It has signed another solar panel producer, Emcore Inc. to lease about half of the building.

"We're going to convert the building to a multi-tenant units," said Howard Schwimmer, managing member of Rexford.

Damn Commercial Real Estate Services' Shan Lee represented the buyer.

To The Pointe

Mani Bros. Real Estate Investment has sold 100 Corporate Pointe to Charles Dunn Equities for about $21 million. The 110,000-square-foot Culver City building, which includes tenants Alliance Bank and New Horizons Computer Learning Center, is 94 percent occupied.

Mani Bros bought the property in 1995, along with the building at 1401 Ocean Ave. in Santa Monica, for a combined $13 million. The Corporate Pointe property was valued at $8 million at the time of the Mani purchase, and the L.A.-based investor spent about $5 million on renovations there, according to Safai, who represented both sides of the recent deal.