Kennedy Wilson Inc. of Beverly Hills has called off its plan to buy the Citigroup Center, better known to television viewers as the “L.A. Law” office tower.
The real estate property services company had planned to pay owner Broadway Real Estate Partners LLC $315 million for the 48-story building at 444 S. Flower St. But the transaction didn’t work when it couldn’t find an equity partner on a tight deadline, according to a source with direct knowledge of the deal. Broadway Real Estate Partners had wanted to wrap up the sale by the end of the year.
Jonathon Yormak, principal at New York City-based Broadway Real Estate Partners, declined to discuss the matter aside from stating the company was not in talks. “We aren’t actively marketing any assets for sale,” he said.
It is unknown if the cancellation of the deal is due to the credit crunch. Kennedy Wilson’s James A. Rosten declined to comment on what he called “rumors.”
However, several sources with knowledge of the downtown market confirmed that Kennedy Wilson had canceled its planned purchase of the 883,000-square-foot, Class A building. It was also reported in a real estate trade publication that Kennedy Wilson sought out the LeFrak Organization Inc. as an equity partner in the potential deal.
Jamie LeFrak, managing director of his family’s New York-based real estate company, confirmed that Kennedy Wilson had been in contact but didn’t provide details.
“We continue to be interested in West L.A.; that is the area that we are focused on,” said LeFrak, whose company bought a Beverly Hills office building from Kennedy Wilson earlier this year.
Broadway Real Estate Partners purchased the building in 2006 as part of a portfolio from Beacon Capital Partners LLC. The Citigroup Center is 90 percent occupied and law firm Parker Stanbury LLP recently renewed its lease for five years.
Sandwich Situation
Downtown nightclub impresario Cedd Moses said that the opening of the reimagined Cole’s Pacific Electric Buffet is still five to seven months away.
Cole’s claims to have invented the French dip sandwich, though nearby Philippe’s also claims the same feat and is far more famous. Both eateries opened in 1908.
Moses, chief executive of nightlife developer 213, has chosen Near Fraser, chef at Grace, to “make the best French dip on the planet.” Cole’s, in the Pacific Electric Lofts building at 610 S. Main St., has been closed since March for the remodel.
“Cole’s is about recasting a Los Angeles classic, conserving the original restaurant’s urban flavor and decor while installing a modern kitchen and an all-star chef,” Moses said in an e-mail interview.
Moses and his company are behind downtown bars such as Seven Grand and Golden Gopher.
Construction Loan Deal
The Barn Lofts residential project is back on track after developer Borman Group of Los Angeles has secured a new $19.6 million construction loan with Pacific National Bank of San Francisco.
The 39-unit project, at 940 E. 2nd St. near Santa Fe Avenue in the Arts District, is expected to break ground early next year, said Michael Guterman of El Segundo-based Highland Realty Capital Inc., which helps developers secure loans.
In April, Borman Group lost its loan with Fremont Investment & Loan when parent Fremont General Corp. became embroiled in the subprime meltdown.
“We only went to a couple of lenders on the rebound,” said Guterman, who secured the loan for Borman Group. “Back in April many of the lenders were sort of cold on downtown. There weren’t a lot of lenders looking at downtown.”
The live-work project is relatively small, which helped secure the loan that closed in October. “It’s not a lot of units and the smaller projects are more attractive to lenders these days. A lot of people are reticent about making big bets today. It’s gotten much harder since when this loan was done,” Guterman said.
Staff reporter Daniel Miller can be reached at [email protected] or (323) 549-5225, ext. 263.
