MetLife Inc.'s investment committee has turned down plans by the New York-based insurance giant to purchase the Aon Center in downtown Los Angeles.
The building's owner, Chicago-based Transwestern Investment Co., earlier struck a deal to sell the roughly 1 million-square-foot tower at 707 Wilshire Blvd. to MetLife for about $200 million. But with the investment committee's thumbs-down vote, the deal is effectively dead, according to sources close to the situation.
There's no word on why the investment committee axed the purchase. Calls to Transwestern, and its brokerage, Eastdil, weren't returned. A MetLife spokesman declined comment.
Also unclear is where Transwestern goes now. The company initially hired Eastdil to refinance the landmark tower, the second-tallest office building in downtown L.A.
It was only after Eastdil brokers brought Transwestern a high-priced bid that executives considered selling the building, which Transwestern purchased in late 2003 from Wells Fargo & Co. for $120 million.
The building had been rumored to be for sale ever since Eastdil was retained. Eastdil, a unit of Wells Fargo & Co., was the firm that brokered Aon Center's sale to Transwestern.
Aon Center's vacancy levels and asking rates have lagged other downtown buildings, according to tenant brokers. In addition, the 200,000 square feet occupied by the building's anchor tenant, Chicago-based insurer Aon Corp., is up for renewal in the next couple of years.
Some brokers say the insurer hasn't made a commitment to stay and has signaled that it may cut the amount of space it takes.
Casden Goes WeHo
Billionaire developer Alan Casden has acquired a 3-acre site in West Hollywood to build a housing and retail project.
His firm, Casden Properties Inc., closed June 30 on the shopping center, named Movietown Plaza, at the southwest corner of Santa Monica Boulevard and Poinsettia Place, according to Howard Katz, a Casden Properties vice president.
Terms weren't disclosed. At prevailing West Hollywood commercial rates, Casden Properties likely spent around $250 a foot for a total sales price of around $33 million.
The shopping center, owned by a general partnership incorporated as Movietown Plaza Shopping Center. is anchored by a Trader Joe's grocery store and restaurants Los Burritos and Yukon Mining Caf & #233; among other specialty retailers.
The site, situated a few blocks west of the West Hollywood Gateway shopping center, is in a redevelopment area. Katz expects to work closely with residents on the project. "I think redevelopment of the site will be welcome," he said. "We just need to do it in a way that's sensitive to everyone's concerns."
Katz expects to file plans with the city of West Hollywood within six months. Casden Properties intends to raze the shopping center, where stores and restaurants flank a central parking lot.
Instead of being set back from the sidewalk, Katz wants the retail shops to front Santa Monica Boulevard. Housing either apartments or condominiums would be built above the retail. A rear surface lot would remain to handle parking for shoppers and diners, and an underground garage would likely be built for residents.
Meanwhile, West Hollywood is contemplating an ordinance that would provide incentives for developers to build more mixed-use developments, such as the one proposed by Casden.
Allyne Winderman, deputy executive director for West Hollywood's redevelopment project, said Casden executives have begun talking with city officials about their plans for the site.
The shopping center also has been identified as a possible location for a higher density mixed-use development. Windermand said the city would like a project with up to 10 stories.
"That's not to say that's what will be approved, but it's an idea that's out there," she said. "It's the wave of things to come."
Casden Properties was advised on the deal by Robert Eller, a partner at the law firm of Manatt Phelps & Phillips LLP.
On a Roll
Broadreach Capital Partners LLC picked up a 122,000-square-foot El Segundo office building for $19.6 million its sixth Southern California acquisition in the last 12 months.
Seller BT Infonet, a subsidiary of British telecom company BT Group Plc, plans to lease back 15,000-32,000 square feet of the building located at 2151 Grand Ave. for 10 years. BT Group acquired the asset in the company's February purchase of the company, formerly called Infonet Services.
"Our plan is to lease-up the project over the next several quarters," said David Simon, managing director and head of Broadreach's Southern California operation. "We believe there is a significant opportunity to properly introduce this ... building within the recovering El Segundo submarket."
*Staff reporter Andy Fixmer can be reached by phone at (323) 549-5225, ext. 263, or by e-mail at firstname.lastname@example.org .
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