Tishman Speyer Properties LP has beefed up its Los Angeles real estate holdings with purchases totaling $316 million.
In downtown L.A., the New York-based real estate investment firm is buying 400 S. Hope St. from the pension fund of law firm O'Melveny & Myers LLP for roughly $245 million.
And in Beverly Hills, the firm is expected to close next month on a $71 million deal to buy a 160,000-square-foot property at 407 N. Maple Drive. The seller is a partnership that includes entertainment mogul David Geffen and health care magnate Dr. Bernard Salick; the building has been sitting empty since its construction two years ago.
Last year, Tishman Speyer sold Colorado Center, a 1.1 million-square-foot Santa Monica business park that was the centerpiece of its L.A holdings, for $443 million.
The O'Melveny building, known as the Mellon Bank Center, will be Tishman's sole downtown property. The $245 million price far outstrips the $180 million projected by brokers.
Tishman Speyer is paying about $349 a foot for the 701,000-square-foot building. By comparison, Trizec Properties Inc. last month paid $343 a square foot for the roughly 1 million-square-foot trophy office tower at 601 S. Figueroa St.
Still, the O'Melveny-owned Mellon Bank Center building is 94 percent leased, while the Figueroa Street building, though higher-quality, has looming vacancy issues.
O'Melveny and mutual fund giant Capital Group of Cos. are locked into long-term leases that account for nearly two-thirds of the Mellon Bank building's square footage.
O'Melveny's partner pension plan was a part-owner of the building since 1982 with the developer, Olympia & York Developments Ltd. When Olympia declared bankruptcy in the early '90s, O'Melveny scooped up the remaining share.
Cushman & Wakefield Inc.'s Richard Plummer, David Hasbrouck and Bill Puget represented O'Melveny on the deal. Plummer and an O'Melveny spokesman didn't return calls. Rick Matthews, a Tishman Speyer outside publicist, said company executives declined to comment.
The purchase of 407 N. Maple Drive adds to Tishman's significant Beverly Hills holdings. The company recently bought a 300,000-square-foot office building at 335-345 N. Maple Drive and the 130,000-square-foot Beverly Mercedes at 9242 Beverly Blvd.
The building Tishman is buying from Geffen and Salick was completed nearly two years ago. Geffen and Salick unsuccessfully sought to convince the Beverly Hills City Council to allow the building to be used as a cardiac care center. When the council vetoed the change of use from an office building, Geffen and Salick hired Bob Safai, a principal at Madison Partners, to find a buyer.
Despite a lackluster leasing market, real estate investors are still paying top dollar for Glendale office buildings.
Des Moines pension fund adviser Principal Global Investors LLC has agreed to pay Tishman Speyer more than $110 million for 101 N. Brand Blvd., a 350,000-square-foot tower at the corner at Broadway, near the Glendale Galleria.
The building has had some of the highest vacancy rates in Glendale. Last year it lost one of its largest tenants when the Disney Stores was acquired by Children's Place Retail Stores Inc. and moved to Pasadena, leaving a 160,000-square-foot vacancy.
Principal Global Investors is showing confidence that the Glendale market will improve with the price it's paying. The company is valuing the building at nearly double the $61.2 million the Los Angeles County Assessor figured it was worth in a February 2004 recording date.
Nearby, bids for an office building at 505 N. Brand Blvd. have been aggressive, according to brokers close to the deal. Buyers are offering $350 a foot, or close to $120 million for the 338,310-square-foot tower.
The building, which is owned by CB Richard Ellis Investors, is 16 percent vacant.
At the end of June, Glendale's office buildings were, on average, 14.4 percent vacant and the premier buildings had asking rents of $2.43 a foot, according to preliminary data from Grubb & Ellis Co.
CB Richard Ellis Inc.'s Tom Bohlinger represented Tishman Speyer in the sale of 101 N. Brand Blvd. and he has the listing on 505 N. Brand Blvd. Bohlinger declined comment.
*Staff reporter Andy Fixmer can be reached by phone at (323) 549-5225, ext. 263, or by e-mail at email@example.com .
For reprint and licensing requests for this article, CLICK HERE.
Stories You May Also Be Interested In
- Tishman to Buy O'Melveny's L.A. Tower; Geffen-Owned Building
- Leases Hit the Highs of Dot-Com Days
- Leases at Highest Since Dot-Com Days
- Good Guess
- Marciano Building Fetches $135 Million
- Technology Company Leasing Leads to Drop in Vacancy Rates
- Reall Estate Column
- Rooftop Fire Turns Sunset Tower Into Even Hotter Property