No. 9
Marvin Davis Buys Fox Plaza
Location, location, location may be the mantra for real estate success, but Marvin Davis has a better one: timing, timing, timing.
“A purchase of this size shows my confidence in the future of Los Angeles,” Davis said in a written statement. “Timing is important, but equally important is recognizing value.”
The billionaire, one of the original developers of Fox Plaza in Century City, last November repurchased the 34-story salmon-colored skyscraper for $253 million, or $400 per square foot, one of the highest prices ever paid for an office building in Southern California.
But the price, while high, is said to be considerably less than Davis raked in when he sold his 50 percent equity stake in Fox Plaza 10 years ago to its major tenant and his partner, Twentieth Century Fox Film Corp.
That deal was not an outright sale, so the price is not a matter of public record. But industry sources say Davis sold in 1988 for about $300 million ($425 a foot), which in today’s dollars computes to more than $600 a foot.
(Fox and Davis originally paid between $110 million and $150 million in land and construction costs to develop the tower.)
Shortly after buying Davis’ 50 percent stake, Fox resold the tower to two investment funds managed by LaSalle Advisors of Chicago for $320 million.
Davis’ decision to buy back Fox Plaza in 1997 was likely based on the realization that demand for Westside office space has been strengthening in recent months, driving lease rates up. Meanwhile, with Century City’s confined area, future development possibilities are severely limited.
As of the end of the third quarter, the most recent figures available, the office vacancy rate in Century City had dropped to 10.2 percent, far below the overall L.A. County rate of 15.9 percent.
The 710,767-square-foot building at 2121 Avenue of the Stars has remained a prime slice of Los Angeles real estate, gaining even more notoriety by being featured in the 1987 film “Die Hard.” Fox Plaza has such prime tenants as former President Ronald Reagan, Marvin Davis himself, and the investment banking firm Donaldson Lufkin & Jenrette. Its occupancy rate is 98 percent.
Frank Swertlow
