6725 W Sunset Blvd · Creative Office · Los Angeles, CA
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Confidential
Sunset Blvd Office – Hollywood
Distressed Acquisition · Creative Class A Office
Sunset Blvd Hollywood
6725 W Sunset Boulevard · Los Angeles, California 90028
77,452
5
34%
$176
1963 / 2023
95
1
Key Metrics
Purchase Price
$13.65M
$176/SF · Accepted Offer
Rentable SF
77,452
5 Floors · ~15K avg plate
Occupancy
34%
25,978 SF occupied
Discount to Basis
68%
Seller basis ~$43–45M
2
Deal Summary
Distressed Acquisition. GWC is acquiring 6725 W Sunset Blvd from Vanbarton Group / KKR at $13.65M ($176/SF) — a 68% discount to the seller's ~$43–45M total basis and an 80% discount to prior peak pricing of ~$900/SF. KKR is facilitating the sale at a 29% haircut to their $19.2M loan balance. The property is a 77,452 SF, 5-story creative office building in the heart of Hollywood, repositioned 2018–2023 with $5M+ in capital expenditures.
Property Details
Address6725 W Sunset Blvd, LA 90028
SubmarketHollywood
ClassA Creative Office
Rentable SF77,452 SF
Floors5
Avg Floorplate~15,000 SF
Lot Size0.927 acres (40,380 SF)
Year Built1963
Renovated2002 / 2018–2023
Ceiling Heights11'–18'
Walk Score95
Opportunity ZoneYes
Transaction
GWC Purchase Price$13.65M ($176/SF)
SellerVanbarton Group
LenderKKR (facilitating sale)
KKR Loan UPB~$19.2M
Seller Total Basis~$43–45M
Discount to Basis68%
Prior Peak Pricing~$900/SF
Replacement Cost~$700/SF
Parking3-level structure, 3.0/1,000
BillboardEast-facing, 84K vehicles/day
SignageRooftop opportunity (5th floor)
3
Building Features
Creative Buildouts
Concrete Floors · Red Brick · Exposed Ceilings
Ground Floor Amenities
Javista Coffee Shop · Professional Soundstage
Ceiling Heights
18' Ground · 11' Floors 2–4 · 16' Floor 5
Parking Structure
3-Level · 3.0 per 1,000 SF Ratio
Billboard / Signage
East-Facing Shear Wall · 84,000 Vehicles/Day
5th Floor Premium
15,481 SF · 16' Ceilings · Panoramic Views
1
Occupancy Overview
Total Occupied
25,978 SF
34% of 77,452 RSF
Total Vacant
51,474 SF
66% of 77,452 RSF
In-Place Revenue
$1.19M
Annual rent from 6 tenants
Avg In-Place Rent
$47.60/SF
Weighted average
2
Tenant Roster (as of 7/1/2025)
Tenant
Suite
SF
Rent/SF/Yr
Annual Rent
Expiration
Status
Catalina's Seafood
100
8,992
$45.34
$407,697
10/31/2028
Active
Funny or Die
110, 350
8,806
$54.11
$476,457
3/31/2031
Active
Tao Group Operating
330
2,397
$48.82
$117,026
8/31/2027
Active
Killphonic Rights
270
1,926
$31.15
$60,000
9/30/2025
Expiring
Barnes Artists Mgmt
220
1,520
$46.80
$71,136
12/31/2028
Active
Javista
120
1,397
$42.60
$59,512
12/31/2034
Active
Outfront Media
RF1
—
—
Signage Income
12/31/2025
Expiring
Bel Air Internet
RF3
—
—
$2,340
Ongoing
Telecom
Metropolis Parking
PK1
—
—
Parking Income
Ongoing
Operator
Tenant Highlights: Catalina's Seafood has been in the building since 2013. Funny or Die recently renewed through 2031 across two suites on multiple floors. Javista, a newly-opened coffee shop, holds the longest lease through 2034, providing ground-floor activation and energy. Killphonic Rights lease expires imminently (9/30/2025).
3
Lease Expiration Schedule
Near-Term Rollover: Killphonic Rights (1,926 SF) expires 9/30/2025 and Outfront Media billboard lease expires 12/31/2025. Tao Group (2,397 SF) rolls in 8/2027. The remaining tenants are stable through 2028–2034.
1
Year 1 Pro Forma — GWC Underwriting
Post-Acquisition Baseline. Year 1 pro forma reflects GWC’s expected income at current occupancy (34%) with adjusted operating expenses — Prop 13 tax reassessment at $13.65M basis, right-sized management overhead, and lean staffing model.
Effective Gross Revenue
$1.65M
Current tenants, annualized
Operating Expenses
$1.00M
60.6% expense ratio
Net Operating Income
$652K
39.4% NOI margin
Going-in Cap Rate
4.78%
On $13.65M purchase
2
Year 1 Pro Forma Income Statement
Revenue
Expected Gross Revenue$1,654,023
Vacancy & Credit Loss—
Effective Gross Revenue$1,654,023
Operating Expenses
Real Estate Taxes$169,260
Insurance$70,000
Utilities$201,308
Property Management$82,701
Cleaning / Maintenance$139,939
Security$70,000
Payroll & Related$90,665
Building Maintenance$43,792
HVAC / Elevator / Fire$53,248
Other (Admin, Prof. Fees, etc.)$81,122
Total Operating Expenses$1,002,035
Net Operating Income$651,988
Debt Service($426,563)
Cash Flow$225,426
Expense Ratio60.6%
Cash-on-Cash Return3.24%
Going-in Cap Rate4.78%
3
Year 1 NOI Waterfall
Improved Margins Post-Acquisition. By resetting property taxes under Prop 13 at the $13.65M basis and right-sizing management overhead, Year 1 operating expenses drop from $1.42M to $1.00M — improving NOI margin from 11.9% to 39.4% on the same revenue base.
4
Year 1 Expense Composition
5
OpEx Adjustments — Prior Owner vs. GWC Year 1
Expense Resets at Acquisition. Upon acquisition at $13.65M, several operating expense lines reset significantly. Property taxes reassessed under Prop 13, and management overhead costs (payroll, security, admin, janitorial) right-sized under new ownership.
Expense
Prior Owner (2024)
GWC Year 1
Savings
Notes
RE Taxes
$412,757
$169,260
$243K
Prop 13 reassessment at $13.65M basis
Insurance
$181,579
$70,000
$112K
Re-underwrite policy at new basis
Security
$149,368
$70,000
$79K
Right-size to building occupancy
Cleaning / Maintenance
$127,644
$139,939
+$12K
Maintained for occupied floors
Property Management
$66,000
$82,701
+$17K
5% of EGR standard fee
Utilities
$157,680
$201,308
+$44K
Normalized for full-year operations
Other OpEx
$320,411
$268,827
$52K
Streamlined admin & overhead
Total OpEx
$1,415,439
$1,002,035
$413K
NOI: $191K → $652K
6
Stabilized Opportunity — Lease-Up Pro Forma
Lease-Up Upside. At 75% occupancy with market rents (~$3.36/SF/mo) and 25% vacancy & credit loss reserve, stabilized gross revenue reaches $2.60M. With operating expenses at 41.5% of revenue, stabilized NOI reaches $1.52M — an 8.72% yield on the $17.4M all-in cost basis.
Stabilized Revenue
$2.60M
EGR after vacancy reserve
Stabilized OpEx
$1.08M
41.5% expense ratio
Stabilized NOI
$1.52M
58.5% NOI margin
Stabilized Yield
8.72%
On $17.4M all-in cost
Stabilized Income
Expected Gross Revenue$3,515,956
Vacancy & Credit Loss (26%)($914,149)
Effective Gross Revenue$2,601,807
Operating Expenses($1,080,177)
Stabilized NOI$1,521,630
Returns & Metrics
Debt Service($540,269)
Cash Flow$981,361
Cash-on-Cash Return9.24%
Stabilized Yield8.72%
All-in Cost Basis$17,442,521
Time to Stabilize~6 months
All-in Cost Breakdown
Purchase Price$13,650,000
Closing Costs (1.0%)$136,500
Construction / TIs ($39/SF)$2,965,666
Soft Costs + Contingency (10%)$296,567
Leasing Commissions$393,788
All-in Cost$17,442,521
1
Deal Structure
Purchase Price
$13.65M
$176/SF · Accepted offer
Equity
$6.825M
50% of capital stack
Debt
$6.825M
50% LTV
KKR Loan UPB
$19.2M
29% haircut to lender
2
Capital Stack Composition
Sources
Equity$6,825,000 (50%)
Debt$6,825,000 (50%)
Total$13,650,000
Uses
Acquisition$13,650,000
Price per SF$176
Total Uses$13,650,000
3
Discount Analysis
Deep Value Entry. GWC is acquiring at $176/SF — an 80% discount to prior peak pricing (~$900/SF at 100% occupancy), 74% below replacement cost (~$700/SF), and 63% below the seller's total basis (~$43–45M). KKR is accepting a 29% haircut on their $19.2M loan to facilitate the sale.
Benchmark
Value
$/SF
GWC Discount
Prior Peak Pricing
~$69.7M
~$900
80%
Replacement Cost
~$54.2M
~$700
74%
Seller Total Basis
~$43–45M
~$570
68%
KKR Loan Balance
$19.2M
$248
29%
GWC Purchase Price
$13.65M
$176
Basis
1
Vacancy Summary
Total Vacant
51,474 SF
66% of building
Vacant Suites
9
Across floors 2–5
Avg Suite (Fl 2–4)
~4,499 SF
Matches 78% of Hollywood leases
Floor 5 (Full Floor)
15,481 SF
16' ceilings, panoramic views
2
Vacant Suites
Suite
Floor
SF
Condition
Notes
230
2
4,876
Pre-built
Creative suite
250
2
3,981
2nd Gen
Creative suite
280
2
3,668
Pre-built
Creative suite
320
3
2,973
Turnkey
Creative suite
380
3
4,310
Pre-existing
Creative suite
420
4
5,661
2nd Gen
Creative suite
450
4
5,575
Turnkey
Creative suite
470
4
4,949
Pre-built
Creative suite
500
5
15,481
2nd Gen
Full floor · Panoramic Hollywood views · 16' ceilings · Rooftop signage
3
Occupancy by Floor
Small Suite Strategy: The average vacant suite on floors 2–4 is ~4,499 SF, which aligns with 78% of Hollywood office leases (sub-5,000 SF). Pre-built and turnkey spec suites with creative finishes reduce tenant improvement costs and accelerate lease-up. The 5th floor (15,481 SF) offers a premium full-floor opportunity for a signature tenant.
1
Investment Strategy
01
Distressed Basis
Acquiring at $176/SF vs ~$900/SF prior peak and ~$700/SF replacement cost — an 80% discount to peak pricing. KKR taking a 29% haircut on $19.2M loan to facilitate sale at $13.65M.
02
Small Suite Strategy
Average vacant suite (~4,499 SF) matches 78% of Hollywood office leases under 5,000 SF. Pre-built spec suites with creative finishes reduce TI costs and lease-up time.
03
Signage Income Upside
Outfront Media billboard lease expiring 12/31/2025. East-facing shear wall with 84,000 vehicles/day visibility. Opportunity to renegotiate at market rates plus rooftop signage on 5th floor.
04
Opportunity Zone
Property is located in a designated Opportunity Zone, providing significant tax benefits for qualified investors including capital gains deferral and potential elimination.
05
Ground Floor Activation
Javista coffee shop (lease through 2034) activates the ground floor and drives foot traffic. Catalina's Seafood restaurant provides additional dining amenity and long-term stability (since 2013).
06
5th Floor Premium
15,481 SF full floor with 16' ceilings and panoramic Hollywood views. Ideal for signature entertainment/media tenant. Rooftop signage opportunity adds marketing value.
07
Hollywood Entertainment Hub
Hollywood submarket is a major entertainment, media, and tech hub. Tenants include Funny or Die, Tao Group, and talent management firms. Walk Score of 95 with strong transit access.
08
Creative Office Demand
Existing creative buildouts (concrete floors, red brick, exposed ceilings) with ceiling heights up to 18'. Professional soundstage on ground floor appeals to entertainment tenants.
2
Risk Factors
High Vacancy (67%): Building is 67% vacant with significant lease-up risk. Year 1 NOI of $652K improves with expense resets, but stabilized returns depend on executing lease-up strategy in a competitive Hollywood submarket.
Near-Term Lease Expirations: Killphonic Rights (1,926 SF) expires 9/30/2025 and Outfront Media billboard lease expires 12/31/2025. Additional rollover from Tao Group in 8/2027 could further reduce occupancy if not renewed.
Older Vintage Building: Built in 1963 with renovations in 2002 and 2018–2023. While repositioned, the building may require ongoing capital for maintenance and systems upgrades to remain competitive with newer product.
Concentrated Tenant Base: Top two tenants (Catalina's Seafood and Funny or Die) represent ~71% of occupied SF. Loss of either would materially impact cash flow.
3
Astro Intelligence Deal Analysis
Conviction: High. The extreme distressed basis ($176/SF vs $700+ replacement cost) provides significant downside protection. The small-suite strategy aligned with Hollywood market demand, creative buildouts already in place, Opportunity Zone benefits, and signage income upside create multiple paths to value creation. The 50/50 equity-debt structure at this basis is conservative, and the ground-floor activation from Javista and Catalina's provides a strong foundation for lease-up.
1
Property Location
Location Details
Address6725 W Sunset Blvd
CityLos Angeles, CA 90028
SubmarketHollywood
Walk Score95
Opportunity ZoneYes
Daily Traffic Count84,000 vehicles/day
Nearby Landmarks
Hollywood & Vine0.3 mi
Paramount Studios0.8 mi
Netflix HQ (Sunset)0.5 mi
Hollywood/Highland0.7 mi
Metro Red Line0.4 mi
US-101 Freeway0.2 mi
2
Hollywood Submarket
Entertainment Capital. Hollywood is home to major studios, production companies, talent agencies, and streaming platforms. The submarket benefits from a deep pool of creative tenants seeking flexible, character-rich office space. 6725 Sunset's creative buildouts, professional soundstage, and billboard/signage visibility position it well within this ecosystem.
Confidential Memorandum — Disclaimer
This document has been prepared by Galaxy Wayco (“GWC”) for informational purposes only and does not constitute an offer to sell, a solicitation of an offer to buy, or a recommendation regarding any security, investment, or real property. This is not intended to be, and should not be construed as, investment, legal, tax, or accounting advice.
All information contained herein has been obtained from sources believed to be reliable, but GWC makes no representation or warranty, express or implied, as to the accuracy, completeness, or timeliness of such information. All financial projections, estimates, and forward-looking statements are based on assumptions that may not be realized and are subject to significant uncertainty and market risk. Actual results may differ materially from those projected.
Prospective investors and buyers should conduct their own independent due diligence and consult with their own legal, tax, financial, and other advisors before making any investment decision. Past performance is not indicative of future results.
This document is confidential and proprietary. It is intended solely for the use of the authorized recipient and may not be reproduced, distributed, or disclosed to any third party without the prior written consent of GWC. By accepting this document, the recipient agrees to maintain its confidentiality and to return or destroy all copies upon request.
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