Pacifica Capital Group, which quietly amassed a huge L.A. County real estate portfolio in recent years, has unloaded a good portion of its industrial properties.
Pacifica sold 15 properties for about $100 million. About two-thirds of those were purchased by Chicago-based First Industrial Realty Trust and money partner Carlyle Group, which acquired 1.2 million square feet for about $64 million.
Tenants or private investors bought the remainder of the properties, said Steve Ohren, president of Pacifica, a low-profile private investment firm in Marina del Rey.
Most of the buildings were in the South Bay, near Los Angeles International Airport, as well as in Hawthorne and Torrance.
The sale is not surprising given Pacifica's track record in real estate. The firm built its large L.A. portfolio in the early and mid-1980s, mostly with a small group of private investors. It then sold the properties in the late 1980s and moved to Denver, where it bought up 6 million square feet of property before selling everything by 1997.
In the meantime, Pacifica returned to L.A. in 1996 and started buying California properties once again, amassing a $400 million portfolio that included office buildings in Marina del Rey, El Segundo and Santa Monica.
Ohren said Pacifica still has some industrial buildings it isn't ready to part with, as well as 20 office buildings that it will eventually sell.
"We're still in the process of adding value and stabilizing rents," Ohren said. "We're value investors. We come in early, build a portfolio and at the right time, sell it."
When Pacifica first returned to L.A., real estate was still emerging from the recession, and prime properties could be had at bargain rates. But starting in 1997, as values rose, the firm had to get creative by rolling over tenants or making physical improvements and raising rents.
Where will Pacifica look next?
"We're always looking for properties in the U.S.," Ohren said. "Now we're finding it difficult. So Pacifica is looking in Europe, starting with Spain. We hope to expand to other countries maybe in Eastern Europe."
University Club building sold
Yet another downtown office building is going telecom.
This time, it's the University Club building at 630 W. Sixth St., which was just purchased by Gateway Realty. The firm specializes in preparing buildings for use by telecommunications companies.
New York-based Gateway bought the 110,000-square-foot building for $5.6 million from the Hertz Group, said Wolfgang Kupka of Vista Realty Advisors, who represented the buyer and seller in the deal.
"It's 100 percent location. It's a block from the library," Kupka said. "It's going to go through a complete renovation."
The top three floors once housed the University Club with other floors occupied by Mitsubishi Bank, but it has stood vacant since the bank left in 1992.
Law firm consolidation
Loeb & Loeb plans to consolidate its downtown and Century City offices at 10100 Santa Monica Blvd.
The law firm is leasing an additional 68,000 square feet at the site, bringing its total space to 110,000 square feet. It will be moving into space being vacated by Princess Cruises, which is moving to Valencia.
"They're rethinking the way space is utilized," said Howard Sadowsky, vice chairman of Julien J. Studley, who negotiated along with Mike Catalano on behalf of Loeb & Loeb. "They'll have the same amount of attorneys, but it's more efficiently laid out."
Loeb & Loeb's downtown office has been located at 1000 Wilshire Blvd. In moving to Century City, the firm will see a lease-rate increase of about $3 per square foot.
"It is a statement (that) a law firm is willing to consolidate on the Westside, where it costs more, but they opted for quality of life," Sadowsky said.
Todd Later of Hines Interests represented the building owner in-house.
REIT buys parcels
Casden Properties, a private real estate investment trust based in Beverly Hills, has bought land bordering the Park La Brea apartment complex for about $75 million. The seller was San Francisco-based Prime Property Capital, owner of sprawling Park La Brea.
The property consists of three in-fill parcels along or off the Third Street side of Park La Brea that are entitled for about 1,500 rental units.
Calls to Casden and broker Eastdil Realty were not returned. But sources familiar with the deal said the plan is to develop high-end apartments.
The property includes an old strip center on Third Street east of Fairfax Avenue and the 16 tennis courts even farther east.
Both E! Entertainment and Western Initiative Media Worldwide are leasing additional space at Wilshire Courtyard.
E! has expanded its headquarters by another 17,000 square feet, for a total of 277,000. Western will increase its headquarters to 140,000 square feet by acquiring 10,000 more square feet.
The two deals bring Wilshire Courtyard to 96 percent occupancy way up from a year ago when the project was only 50 percent leased, said Tom McCarthy, partner at McCarthy Cook & Co., one of the project owners.
"You're starting to see the confluence of a bunch of things," McCarthy said. "There are a lot of transactions in the Miracle Mile in the better buildings. Large floor plates and creative, user-friendly buildings are where people want to go."
E! was represented by Douglas Econn and Gerald Porter of Cresa Partners and Western by Blake Mirkin, Brian Davies and David Toomey of CB Richard Ellis. The landlord was represented by Hunt Barnett and Rick Buckley of CB.
Century City deal
Equity Office Properties Trust has purchased a portion of the mezzanine debt on 1999 Ave. of the Stars, known as SunAmerica Center. Though one of L.A.'s most prestigious office buildings, it's also burdened with high debt.
The deal involved a restructuring and refinancing of debt in which the Chicago-based real estate investment trust paid $72.4 million for 67 percent of the mezzanine portion.
Lehman Brothers also arranged $210 million of first mortgage financing, which will replace a similar amount of existing secured debt.
The 38-story tower will continue to be owned by JMB Realty Corp., which retained Equity to manage and lease the property as part of the deal.
Elizabeth Hayes can be reached at (323) 549-5225 ext. 229 or at email@example.com
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