Guitar Center has quietly cashed out of its Westlake Village corporate campus in an off-market sale-leaseback that hands over the deed but keeps the music retailer firmly in place, at least for now. The deal injects fresh capital into the company while it works through a turnaround plan and lets management stay put on the same two-building campus it uses for corporate operations.
The buyer is a three-way investor group, Beverly Hills-based Arise Investments, Oak Park Investments in Westwood, and Nebraska firm Nelnet Real Estate Ventures, which paid about $19.3 million for the 98,086-square-foot property at 5775-5785 Lindero Canyon Road. The transaction was financed by California Bank & Trust and structured as a sale-leaseback that keeps Guitar Center as the sole tenant for at least the next three years, according to the Los Angeles Business Journal.
"It was part of their overall debt restructuring to give them a lot more flexibility and liquidity, and they just didn’t want to own their own real estate anymore," Arise principal Danny Soroudi told the Los Angeles Business Journal. Soroudi said the group paid roughly $200 per square foot and plans to hold the campus for five to 10 years, a window that gives Guitar Center time to work through its turnaround while the investors wait to see how the story plays out, as reported by the Los Angeles Business Journal.
Debt Restructuring Gave Company Room To Maneuver
The sale follows a recent refinancing that extended key debt maturities and bought the company time to push through strategic changes. In August, S&P Global upgraded Guitar Center’s issuer rating to "CCC+" while warning that the retailer remains highly leveraged. For more details on the credit action and the extension, see S&P Global. Additional industry coverage is available at Guitar.com.
Why Westlake Village Appealed
The buyers pointed to the campus’ Westlake Village location and its flexible, industrial-style buildings as a rare find in a tight Southern California market. Oak Park Investments described the property in a LinkedIn post as a high-quality industrial and office opportunity in a supply-constrained submarket. The same announcement noted that the campus was acquired through an off-market sale-leaseback with Guitar Center and highlighted low vacancy and limited new supply in the area, according to Oak Park Investments.
What It Means For Guitar Center And The Local Market
For Guitar Center, the sale-leaseback frees up cash that can be used as working capital while the chain invests in products and stores under its turnaround strategy. For Westlake Village, the near-term impact is subtle. The retailer stays put under the current lease, so there is no immediate change to who occupies the campus. Longer term, the property’s future hinges on whether Guitar Center eventually consolidates or relocates, or whether the investor group lines up a new tenant once the leaseback period ends.
