IRVINE — Advanced Real Estate is betting that Hollywood will continue to attract high-end renters with its $202 million purchase of two luxury apartment towers, highlighting a long-term investment in one of Los Angeles’ most well-known rental markets.
The Irvine-based company acquired the 200-unit Sky Hollywood at 550 N. El Centro Ave., just a block from Larchmont and Paramount Pictures and the 193-unit Jardine Hollywood towers at 6390 De Longpre Ave., which is less than a block from Netflix’s Los Angeles headquarters.
Advanced paid $513,995 per unit for the two buildings, which it bought from Kilroy Realty Corporation. This real estate deal is the largest in Los Angeles so far this year.
This deal is larger than the $141 million Holland Residential paid for the 344-unit Esperanza at Duarte Station in Duarte, which it bought from MBK Real Estate Co.
The JLL team of Blake Rogers, Dillon Bergum, Alexandra Caniglia and Kip Malo brokered the deal, according to CoStar records.
Betting on Hollywood
Advanced’s acquisition comes at a time when some investors remain cautious about multifamily properties, especially in Los Angeles city centers tied to the entertainment industry.
In recent years, Hollywood and LA’s entertainment industry have faced pandemic disruptions, labor strikes and shifting production patterns.
Advanced President Paul Julian told the Business Journal that the main reasons for the deal were scarcity and timing. He pointed out that the World Cup and the 2028 Los Angeles Olympics are coming up soon.
The deal, he said, also aligns with the company’s broader strategy of buying and holding high-quality apartments across Southern California. Advanced, founded over 40 years ago by his father, Chief Executive Rick Julian, now owns nearly 13,000 units, valued at about $5 billion.
“We’re long-term investors. We buy and hold indefinitely,” Paul Julian told the Business Journal.
He said this was an opportunity to purchase “irreplaceable assets at a discount to replacement cost.”
“That insulates us from any worry of competition from future high-rise development,” Paul Julian said.
These two luxury towers make up a large part of Hollywood’s handful of high-rise apartments, he said.
Advanced now controls about 60% of this segment, which could give the company greater pricing power in a market with few luxury buildings and limited supply.
Hollywood Demand
Julian acknowledged the current risks in the entertainment landscape but said conditions on the ground are improving.
“If you walk around there, you’ll see the difference from a year or two ago,” he said. “The fundamentals are still great. It’s an incredible location with amenities, transportation and restaurants. It’s a place people still want to live, regardless of what the industry is doing.”
He pointed to renewed investment in production, including expansions tied to Netflix, as a sign of momentum returning to the area.
These properties also attract high-end renters. Penthouses can rent for $12,000 to $20,000 a month, and residents include entertainment executives, athletes, and social media influencers.
Julian said demand has stayed strong. According to CoStar, Sky Hollywood has a 2% vacancy rate and an average asking rent of $5,600. Meanwhile, the Jardine has an 8.3% vacancy rate and an asking rent of $4,400.
“When we purchased the buildings, they were over 95% occupied, and they stay full,” he said. “There’s really not that many better options in that market.”
Instead of major changes, Advanced plans to make modest upgrades. The company will spend “a few million dollars” on deferred maintenance and improving common areas such as fitness centers, lounges, and rooftop amenities.
Acquiring More Assets
The Hollywood purchase is the third investment made by Advanced’s newest fund.
The company acquired the 138-unit The Cove apartment in West Covina in October and the 104-unit Newhope Village in Santa Ana late last year.
Julian said the company plans to buy more apartment buildings in Southern California this year. Even with economic uncertainty, Julian said the company still prefers to invest in apartment buildings.
“When you look at all the real estate asset types, we feel multifamily is the safest,” he said. “Everyone needs a place to live.”
