Sanwa Bank Plaza Sold
Hines Interests bought the 52-story Sanwa Bank Plaza office building in downtown L.A., the third-tallest building in Los Angeles, from the U.S. unit of Japanese real estate developer Mitsui Fudosan Co.
Terms weren’t disclosed. But Real Estate Research Corp., a property research firm, said the purchase price was $125 million, a record for an office building in downtown.
Located in the heart of the financial district, the 1 million-square-foot tower is considered one of the jewels of the city’s real estate market.
Completed in 1990 just as the property market crashed, the building has a distinctive octagonal shape, features a 75-foot-high atrium, and granite and marble in its lobbies. It’s 97 percent leased, with Sanwa Bank as the main tenant.
Houston-based Hines served as development manager for Mitsui Fudosan when the building was built and has been responsible for its leasing and management ever since.
“With this transaction, Hines is placing a large bet on the continued strength of the downtown L.A. market,” said Colin Shepherd, senior vice president of Hines.
The firm is one of the largest closely held real estate owners in the country and owns or manages 4 million square feet of space in and around Los Angeles.
(Bloomberg News)
Hilton Buying Hotel Chain
After struggling for three years to complete a major acquisition, Hilton Hotels Corp. agreed to buy Promus Hotels for about $4 billion in cash and stock.
The transaction is designed to help Hilton compete against two other leading hotel chains, Marriott International Inc. and Starwood Hotels and Resorts Worldwide Inc.
In addition, Hilton expects to realize $90 million in annual savings from the merger, with about $60 million of that coming in the first year.
However, the price Hilton agreed to pay for Memphis-based Promus is about 40 percent above the level at which Promus stock was trading before the merger talks were disclosed last week.
The deal represents somewhat of a comeback for Stephen F. Bollenbach, Hilton’s chief executive and president. Bollenbach was a respected deal maker in former jobs at Walt Disney Co. and Marriott. He had waged several unsuccessful acquisition bids since joining Hilton in 1996.
Riordan Endorses Soboroff
With two years left in his term, L.A. Mayor Richard Riordan endorsed millionaire developer Steve Soboroff to replace him in office.
Riordan expressed his support in a letter sent to potential Soboroff supporters. The move is apparently intended to jump-start the campaign of Soboroff, a pro-business Republican, and open doors among possible contributors.
In the letter, Riordan cited the civic involvement of Soboroff, who acts as an unpaid advisor to the mayor while chairing an oversight committee charged with improving local schools. Soboroff also helped win approval for the Staples Center and Alameda Corridor projects.
City Attorney James Hahn and City Councilman Joel Wachs are the only other announced candidates for the mayor’s post. Other possible contenders are Assembly Speaker Antonio Villaraigosa, Rep. Xavier Becerra, state Controller Kathleen Connell and county Supervisor Zev Yaroslavsky.
NBC May Acquire Paxson
NBC was reportedly close to an agreement to buy a 32 percent stake in Paxson Communications Corp. in a deal valued at about $400 million that continued a flurry of deal making in the television industry.
Neither company offered comment on the situation.
By taking a stake in Paxson, NBC would gain access to one of the largest stables of TV stations in the country. It would also get an expanded cable presence because cable operators are required to carry Paxson’s 73 stations, reaching 76 percent of the country.
Paxson had hoped to build a big family audience for its PaxNet programming, but is so far struggling.
Because NBC is close to a federal cap on the number of stations a single company can own, the network can’t buy Paxson outright. But according to people familiar with the talks, NBC would have the ability to boost its stake in Paxson if the federal cap is lifted.
Tourist Traffic Increases
More passenger traffic poured through Los Angeles International Airport this summer than a year ago and occupancy at area hotels increased to 75 percent, tourism officials said.
The Labor Day weekend capped a busy summer at LAX. Figures for June, the latest month available, showed a 3 percent rise in passenger traffic over the same period a year earlier. Airport spokesman Tom Winfrey said officials are expecting similar increases for July and August.
In June, the airport handled about 5.6 million passengers, with foreign travelers posting a 7 percent increase over the like period a year ago.
Meanwhile, Bruce Baltin, a senior vice president with PKF Consulting, which tracks the local hospitality industry, said area hotels averaged 78 percent occupancy in June, a 2 percent increase over a year ago. Preliminary statistics for July show a 5 percent jump, Baltin said.
County Chosen for Insurance Test
Los Angeles County was chosen as the testing ground for the state’s first low-cost automobile insurance, a $400-a-year policy to be offered to low-income drivers with good driving records.
The county was chosen for the program because it has 1.8 million, or 40 percent, of the state’s uninsured drivers.
In a compromise with the insurance industry, legislators negotiated an agreement to allow a bare-bones auto policy to be sold only in L.A. County and only to drivers whose annual income is at or below 150 percent of the federal poverty level. For a family of three, that translates to about $20,000.
The agreement, which still must win final approval from the Assembly and Senate, would require insurers to begin selling the policies in 2000.
