Six months after announcing a move to Houston, oil company Occidental Petroleum Corp. has put its Westwood headquarters building on the market.
The Santa Monica office of real estate investment banking firm Eastdil Secured last month began marketing the 15-story building at 10889 Wilshire Blvd., including the attached marble-clad Hammer Museum. No asking price was listed.
Getting top dollar for the building, built in 1962, might prove a challenge, however, as the Hammer has an option to purchase the building at the end of its 30-year, rent-free lease in April 2021.
The museum, founded in 1990 by Occidental’s ostentatious former Chairman Armand Hammer, was promised a fixed price of $55 million for the 311,000-square-foot property. At $177 a foot, that was considered fair market value back in 1990, but compared with recent sales of similar properties in the area, would be a steep discount today. Murdock Plaza, for example, a 17-story, red-brick tower across the street from the Occidental building, sold earlier this summer for about $125 million, or $528 a square foot.
Real estate industry sources said the museum’s purchase option would likely chill interest from investors. Rather, they suggested, the building might be most appropriate for a buyer willing to sell in a few years and then lease back the space. Eastdil’s marketing materials for the property frame the museum’s fixed-price option for the property as just such an opportunity.
“Should the museum exercise its purchase option, the owner of the building will have the ability to lease back over 200,000 square feet on a long-term basis at market rate,” its brochure reads.
The Oxy building, at the northeast corner of Wilshire and Westwood boulevards, has long been occupied mostly by the two tenants: Occidental, which took about 200,000 square feet on floors four through 16, though its actual occupancy was said to have been sparse for years as it shifted operations to Texas; and the Hammer, which uses about 105,000 square feet on floors one through four. City National Bank takes about 5,000 square feet on the ground floor. The bank’s lease expires in June 2018, and Occidental plans to move out in the second quarter of next year.
Westside Win
A vacant 2.6-acre lot in West Los Angeles, situated along a nondescript stretch of Santa Monica Boulevard, sold last month after a competitive bidding process pulled in more than two dozen offers, some from as far away as China.
The development site, at 11674 Santa Monica Blvd., was sold to El Segundo real estate company United El Segundo Inc. for $37.5 million, about $14.2 million an acre.
The seller, Safeway Inc., was recently acquired by Boise, Idaho, grocery company Albertsons. Safeway had promised to build a Pavilions grocery store on the site, once home to a Vons grocery that has since been demolished, but canned those plans when it put the property on the market in early July.
Jeff Appel, chairman of United El Segundo, said he has already begun meeting with community and City Council members about how best to develop the site.
“I have ideas in my mind, but I want to understand what the community wants first,” he said. “It’s approved for a market, so I’ll consider that first. But I don’t want to just build a box.”
Tyler Stevens and his father, Craig, in the downtown L.A. office of Colliers International represented the seller in the deal. Dawn Dyer and Paul Sheehan of Dyer Sheehan Group Inc. in Ventura represented the buyer.
The former Vons site is not the only development project in early planning stages along that sleepy stretch of Santa Monica. In January, Hollywood developer CIM Group purchased a portfolio of four retail properties nearby, including the former Buerge Ford car dealership, for $21.7 million, also about $14 million an acre. Preliminary plans for the 1.6-acre assemblage call for demolishing the small retail boxes and building a four-story apartment building with 157 units.
Moving Parts
New York residential brokerage firm Douglas Elliman Real Estate, which opened its first L.A. office earlier this year, has named Colin Keenan a senior vice president and managing broker in its Beverly Hills outpost. Keenan joined Douglas Elliman from Beverly Hills firm Nourmand & Associates. … Downtown L.A. real estate firm Clarion Partners has named Bryan Crane director of acquisitions on the West Coast. Crane joined the firm from Washington, D.C., investment firm Artemis Real Estate Partners, where he was a principal. At Clarion, Crane will co-head the acquisitions group from the downtown office with Dean Rostovsky.
Staff reporter Bethany Firnhaber can be reached at [email protected] or (323) 549-5225, ext. 235.
