A wide variety of Los Angeles County properties have changed hands over the past 12 months, and no two properties among the five highest-priced sales are alike.
They encompass a range of property types a million-square-foot Santa Monica office campus, a design mart, a regional shopping mall, a class-A high-rise in Century City and an industrial park. The buyers are a diverse lot as well a real estate investment trust, large Canadian public company and private, deep-pocketed investment firms.
Here’s a rundown of the top five deals, valued from $360 million to $90.6 million.
MGM Plaza, Santa Monica
Buyer: Tishman Speyer Properties
Seller: MaguirePartners
Price: $353 million
About five different investors were seriously interested in MGM Plaza when MaguirePartners placed it on the block earlier this year. West Los Angeles-based Douglas Emmett and New York real estate giant Tishman Speyer Properties duked it out for title to the million-square-foot campus.
In the end, Tishman Speyer won.
“They had the financial muscle and proved it early on,” said David McKenney, formerly with Cushman & Wakefield, who helped negotiate the sale. “We had some very good buyers because it’s a superlative asset. It was a high price, but the returns to them will be satisfactory.”
In large part, it came down to Tishman Speyer’s willingness to proceed with the acquisition without a lease renewal by the project’s anchor tenant, Metro-Goldwyn-Mayer Inc. MGM, whose lease is up next year, takes up close to 400,000 square feet in the complex, while Symantec leases more than 100,000 square feet. MGM Plaza is currently 99 percent occupied.
The well-landscaped, six-building campus is heavy with amenities, including restaurants, basketball and volleyball courts and a health club. Rents are around $4 per square foot per month, among the top rates in the L.A. area.
Pacific Design Center, West Hollywood
Buyer: Cohen Brothers Realty
Seller: Teachers Insurance & Annuity
Association
Price: $165 million
New York-based Cohen Brothers and the Cheslock Bakker Opportunity Fund acquired the behemoth “Blue Whale” complex in West Hollywood last fall for about $165 million. But the investment won’t stop there.
The new owners said at the time of the purchase they plan to spend another $40 million to convert most of the green building to office space, while leaving showroom space concentrated in the blue building.
Cohen and Cheslock Bakker also said they plan further development at the site. The city approved, in concept, plans for a third, red-glass building encompassing 450,000 square feet, which would be developed as class-A office space. And the owners are eyeing two other locations near the center for retail, office and housing development.
Cohen has already turned around Manhattan’s Design & Decoration Building, which is considered a premier high-end home furnishings center. Now he’ll be put to the test with PDC.
Although the original Cesar Pelli-designed blue building was a big hit when it opened in 1975, the green building added more showroom space than the marketplace could absorb and the project struggled with vacancies and debt. But with the Westside office market on fire, the time could be ripe for a turnaround.
Santa Monica Place, Santa Monica
Buyer: Macerich Co.
Seller: The Rouse Co.
Price: $130 million
Santa Monica-based Macerich added another well-located Westside mall to its portfolio with its purchase of Santa Monica Place for $130 million last fall.
Maryland-based Rouse Co. sold the Frank Gehry-designed mall because it didn’t mesh well with the rest of its portfolio, but for Macerich, it’s a great fit. Macerich, also known as the “Mall Doctor,” likes to cluster nearby centers to take advantage of operational and marketing synergies.
The real estate investment trust also owns the Westside Pavilion and Villa Marina Marketplace. With Santa Monica Place added to the mix, the malls serve a million residents with an average annual household income of $84,000. Macerich plans to make physical changes and tweak the tenant roster to increase annual per-square-foot sales, which already stand at a healthy $375.
1888 Century Park East, Century City
Buyer: Bentall US LLC
Seller: Whitehall Street Real Estate Ltd.
Partnership and Walton Street Capital
Price: $111 million
Bentall Corp., a publicly traded real estate company based in Vancouver, was looking hard for property in the Los Angeles area when 1888 Century Park East came on the market.
“We’ve had an affinity for the L.A. Basin. Our tentacles were out for some time. This is the first one we were able to make happen,” said Gary Carpenter, executive vice president of the firm’s U.S. operations.
Bentall US LLC bought the 21-story tower last August for $111 million and is investing in upgrades, with an eye to holding it long term and increasing the value. Carpenter said the tower was under-performing in terms of “where the market is going to go.” It is currently 94 percent occupied, mostly with traditional Century City tenants such as lawyers and accountants, as well as Turner Entertainment.
Carpenter said Bentall hopes to further expand into Southern California and add to its holdings here.
5350-5580 Bandini Blvd., Bell
Buyer: Clarion Partners
Seller: NewCrow III
Price: $98.6 million
Modern industrial buildings in the southeast area of Los Angeles County are a hot commodity. Consider the 1.8 million square feet of space at 5350-5580 Bandini Blvd. in Bell, which is almost fully occupied.
Boston real estate investment manager Clarion Partners purchased the industrial park last fall on behalf of pension fund investors for almost $100 million from a group that included AEW Capital Management.
An institutional investment fund managed by AEW developed the buildings at the site of a former military base in the late 1970s in a joint venture with Trammell Crow Co. It sold the 14 buildings in a liquidation of the fund.
Ranging in size from 15,000 square feet to 125,000 square feet, the buildings are occupied by a variety of tenants, most of which use the space for local distribution operations.
