Transpacific Development Co. is undergoing a major reorganization of its portfolio, with the company cashing out its office properties and buying warehouse and distribution centers outside the state.
The Torrance-based company hopes to raise about $350 million by selling three Southern California office properties, including its Sony Pictures Plaza at 10000 Washington Blvd.
Sony Pictures leases the entire 345,000-square-foot Culver City office building, which is across from the company's studio backlot. Sony's lease runs through 2027 and allows for rents to be adjusted to market rates every five years.
Brokers believe that the eight-story building will fetch more than $300 a foot, which values the property at a minimum of $103.5 million. Palmer Team, based in Sacramento, has the listing.
Profits from its office buildings will be used to help pay for portfolios of warehouse properties.
On Dec. 9, TDC expects to close on a $130 million purchase of a 1 million-square-foot portfolio of Midwest warehouse and distribution buildings. In addition, the company is in advanced stages of negotiating for another warehouse portfolio of a similar size, according to Tom Irish, Transpacific Development's president.
Even in an overheated L.A. County market, TDC's volume of activity stands out. The company is on track toward $225 million in sales and acquisitions by year's end and $500 million in 2006.
So far this year TDC sold a 215,000-square-foot office building at 400 R Street in Sacramento to California Public Employees Retirement System for $44 million. The company used the proceeds to buy a 930,000-square-foot Calpers portfolio consisting of two Texas distribution centers for $39 million.
In the second quarter, TDC sold its 303-room Cerritos Sheraton to San Clemente-based Sunstone Hotel Investors Inc. for $24 million. However, Irish said that TDC will likely hold onto its nearby Cerritos Town Center, which is currently about 74 percent leased.
"We still plan on holding several California properties," Irish said, "but overall we're trading high quality California assets for distribution centers in the Midwest and in Texas, which makes more sense economically."
In addition to the Sony building, TDC has listed a 500,000-square-foot Oakland office building at 1999 Harrison St. Secured Capital Corp. has the listing. The company is also in preliminary stages of selling a Hawaiian office building at 711 Kapiolani Way in Honolulu.
After buying the Wilshire Rodeo complex in Beverly Hills a year ago, Broadway Real Estate Partners LLC has put the office and retail building back on the market.
Broadway hired Eastdil to market the 246,000-square-foot center at 9560 Wilshire Blvd., which contains about 50,000 square feet of premium ground floor storefronts with tenants that include Nike and Burberry.
Since buying the building, Broadway has renewed leases with tenants in the overhead office space, which is more than 90 percent leased.
After flirting with several new possible locations, United Talent Agency inked a long-term lease earlier this year to expand and stay in the Wilshire Rodeo building. Other tenants include UBS AG and Merrill Lynch & Co.
With those renewed leases, the building could sell for "north of $200 million," said Madison Partners principal Bob Safai.
"There's no (tenant) roll-over in the deal," Safai said. "It's like buying a long-term bond in one of the best markets in the country."
Broadway bought the mixed-use building for about $151 million from the Florida State Board pension fund, managed by Chicago-based real estate investment advisor Heitman LLC.
The Florida State Board bought the building, which was the former headquarters of junk bond firm Drexel Burnham Lambert, in 1995 from Citicorp Real Estate for $81 million.
Broadway's decision to sell the Wilshire Rodeo complex comes on the heels of the New York-based firm's $192 million purchase of the Aon Center, a 62-story tower at 707 Wilshire Blvd., the second-tallest building in downtown Los Angeles.
Last year, Broadway paid $70 million for the 12-story, 110,000-square-foot office building at 9701 Wilshire Blvd., the tallest office building in Beverly Hills' Golden Triangle.
Calls to Scott Sorensen, who runs Broadway's L.A. office, weren't returned.
The Doheny Family Trust shelled out $17.8 million for a 68,000-square-foot building at 5245 Pacific Concourse Drive, according to a press release.
The family trust bought the three-story office building, which is fully leased, from Greenlaw Partners LLC. The Newport Beach-based firm bought the five-acre mixed-use Pacific Concourse complex near Los Angeles International Airport earlier this year for $44.2 million.
Pacific Concourse, built in 1989, includes three office buildings and Los Angeles County Superior Court's Airport Courthouse. Windstar Communities LLC, a division of San Diego-based Nexus Properties Inc., is planning a 430-unit apartment building at the site, according to real estate Web site GlobeSt.com.
A Grubb & Ellis Co. team of Kevin Shannon, Michael Moore, Chris Sinfield, Bill Maher, Scott Shumacher and Paul Perkins represented the Doheny Family Trust and Greenlaw in the deal.
*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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