After buying the MCI Center in downtown Los Angeles a year ago, Cargill Inc. is close to flipping the property for a total of $200 million, according to sources close to the deal.

David Lee’s Jamison Properties Inc. has agreed to pay about $160 million for the 678,000-square-foot office building at 700 Flower St., the Macy’s Plaza retail center and a 3,000-space parking garage.

Additionally, Prudential Real Estate Investors and Portland, Ore.-based Dow Hotel Co. are buying the center’s 485-room Hyatt Regency Los Angeles for about $40 million.

Both prospective buyers have signed letters of intent, but sources said the deals could still fall apart.

Citing confidentiality agreements, both Lee and Murray Dow, president of Dow Hotel, declined to comment. Secured Capital Corp., which is marketing the hotel component, declined to comment.

A completed sale would net Minnetonka, Minn.-based Cargill and its partner, Beverly Hills-based real estate services company Kennedy-Wilson Inc., nearly $75 million. They paid $124 million for the 2.5 million square foot downtown complex in November 2003.

Calls to Kennedy-Wilson, which is also marketing the property, weren’t returned.

The price increase is partly a reflection of improved occupancy in the office building and a rebound in the downtown hotel market.

While managing the property, Kennedy-Wilson helped sign leases boosting occupancy in the 30-year-old office building, including a substantial lease with ImpreMedia LLC’s Spanish language newspaper La Opini & #243;n.

Still, rents for the office building are around $2 a foot, less than the roughly $2.30 a foot asking rents for comparable space downtown. The retail center is nearly full and the large parking garage is profitable.

Dow’s involvement with the hotel may finally end rumors of the property’s prospective conversion into condominiums. It also means the property won’t likely continue as a Hyatt, which doesn’t franchise its brand to third-party operators.

The hotel’s general manager, Colleen Kareti, has been reassigned to a Hyatt in Orange County. Kareti described the move as a promotion and said her departure wasn’t tied to a possible sale.

Known as Broadway Plaza when opened in 1973, the mixed-use complex was renamed MCI Center when the telecommunications giant signed a long-term lease in the office tower in 1993. The retail component was renamed Macy’s Plaza in 1996, the year after Federated Department Stores Inc. acquired the chain.

‘Virtual Real Estate’

Corporate housing provider Oakwood Worldwide may have sold its U.S. portfolio to Archstone-Smith Trust, but that doesn’t mean it’s getting out of the business.

Los Angeles-based Oakwood Worldwide announced last week it will sell its U.S. portfolio of 30 apartment buildings to Archstone-Smith for $1.4 billion, including its flagship 1,151-unit Oakwood Toluca Hills property.

The transaction includes 10,000 apartment units, more than 40 percent of them in Southern California, Archstone-Smith said in a press release. Oakwood, a manager and owner of corporate housing and furnished apartments, will continue to manage about half of the units being sold.

It will be left with a portfolio of 20,000 managed corporate housing and furnished units worldwide, including 3,000 units in Los Angeles. Its only owned properties will be overseas; part of the funds from the sale will be used to expand its holdings in Asia and Europe.

Even without owning anything in the U.S., Oakwood Worldwide will still manage more rooms than its 10 largest competitors combined, according to Oakwood Chairman Howard F. Ruby.

The sale is intended to give Oakwood’s more than 30 investors a return and more flexibility. It’s also a way for the company to control buildings without owning them and still draw strong cash flows.

“We want to refocus our attention away from board-and-nail asset owners and move more into what we like to call virtual real estate,” Ruby said.

Large corporations hire Oakwood to provide temporary housing to employees on short-term assignments or those transferring to a new city. The company was founded in 1960 by Ruby, Ed Broida and Bob Franks and remains privately held.

The deal will boost Archstone-Smith’s Southern California assets to 22 percent of its portfolio from 19 percent. Closing is expected to occur in stages, beginning in April.

Also included in the sale are the 883-unit Oakwood Woodland Hills East in Woodland Hills, the 597-unit Oakwood Marina del Rey and the 549-unit Oakwood Long Beach Marina in Seal Beach. There are also smaller buildings in Pasadena, Thousand Oaks and La Jolla.

Other Oakwood properties being sold are located in the Washington, D.C., area, the San Francisco Bay Area and a number of smaller properties in Boston, Chicago and near Seattle.

In recent years, Englewood, Colo.-based Archstone-Smith has been aggressively acquiring properties throughout the L.A. region, particularly on the Westside. The publicly traded real estate investment trust is the nation’s third-largest apartment owner with 250 complexes that altogether contain 90,000 units.

Golden, Despite Triangle

Two properties on the rim of Beverly Hills’ tony Golden Triangle have traded for high prices.

A partnership of Greenstreet Capital Partners LLC and Newport Beach-based Professional Real Estate Services Inc. struck a deal to sell 315 S. Beverly Drive to Apollo Real Estate Advisors LP for $16.5 million.

The 66,000-square-foot property, which sits on a ground lease with 40 years remaining, sold for about $250 a foot. The property is about 90 percent leased to mostly small, entertainment industry-related tenants; rents range between $2.25 and $2.40 a foot, below the city’s average.

Nick Brighton, president of Velocity Investment Sales, represented the partnership that sold the building. He also represented the sellers when they bought the building in 2002 for $12.5 million.

Also, the Estate of Max Bernbaum has agreed to sell the 6,100-square-foot, two-story building at 246 S. Beverly Drive to an unnamed non-profit group for $3.85 million a whopping $631 a foot.

The non-profit plans to use the building as its new offices, according to Christopher Bonbright of Ramsey-Shilling Co., who represented the group. The estate was represented by John Bertram and Luke Palmo of Coldwell Banker Commercial Westmac.

Staff reporter Andy Fixmer can be reached by phone at (323) 549-5225, ext. 263, or by e-mail at

[email protected]

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