Zell Buys Downtown Tower
Downtown Los Angeles got a boost in October when Chicago-based real estate investment trust Equity Office Properties Trust purchased the 550 South Hope building for about $100 million. Equity, led by legendary financier Sam Zell, stamped the deal with more significance than the sale of the building itself.
"Zell has made his reputation as a savvy investor," Drew Planting, director of Cushman & Wakefield, said at the time of the deal. "He's not going to buy buildings that decrease in value."
Zell purchased 550 S. Hope from Japan's Obayashi Corp., which built the 28-story tower in 1991 for about $170 million. The sale was one of only a few Japanese divestments of downtown real estate this year despite predictions by some analysts that Japan's financial troubles would lead to more sales.
Zell's entrance into downtown suggests that the market's long-awaited recovery may be near. To date, downtown's office vacancy rate has been stuck at about 17 percent, while the robust Westside market has improved to 12 percent.
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