ScanlanKemperBard Cos. is humming “Hooray for Hollywood” all the way to the bank.

After owning the CNN tower on Sunset Boulevard for less than two years, the Portland, Ore.-based firm is pocketing $18 million in profit on the building.

Broadreach Capital Partners LLC has agreed to pay $52 million for the 14-story building, a nearly 60 percent markup from the purchase price paid by ScanlanKemperBard. The deal is expected to close this week.

The 200,000-square-foot CNN tower at 6430 Sunset Blvd. is commanding $270 a foot a 4 percent increase over what CB Richard Ellis Investors paid late last year for the nearby Sunset Media Tower.

“We achieved our seven-year investment goal in 22 months,” said Bob Scanlan, managing director of ScanlanKemperBard. “Sunset Tower produced a 42 percent internal rate of return for our investors.”

Even so, Scanlan said Broadreach didn’t overpay because he believes rents in the Hollywood market will spike in the next several years. “One could argue Broachreach mad a good buy,” Scanlan said. “They want to sell in two to three years (at a 20 percent mark-up) and I believe they’ll get that.”

Unlike recent buyers of Hollywood office buildings, Broadreach isn’t planning on converting the tower into residential condominiums, Scanlan said.

Calls to Broadreach seeking comment weren’t returned. The building’s tenants have received estoppel certificates, a legally required notification when there’s an impending sale.

One question mark: CNN. Turner Broadcasting Systems Inc., a Time Warner Inc. subsidiary that owns the cable news channel, shelved an earlier deal to move the broadcast studios to a 40,000-square-foot space at 6500 Wilshire Blvd. Company executives in Atlanta put the deal on hold to look at more buildings, although they may decide to stay put.

Scanlan has previously said that CNN, which takes about 16 percent of the Hollywood building and has naming rights, is paying below-market rent. If CNN departs, a new tenant will probably pay higher rates.

Since ScanlanKemperBard bought the CNN tower, leasing rates have risen to $2.30 a foot from $1.70 a foot a month, Scanlan said. The firm is also negotiating with a service-oriented retailer to take the building’s 6,000-square-foot ground floor space for $3.25 a foot.

Scanlan said that Broadreach’s business plan anticipates CNN departing the building. “Now if CNN wants to stay they’re going to have to pay big for that.”

Carl Muhlstein, a senior director at Cushman & Wakefield Inc., represented both sides of the transaction.

Towering Deal


The owners of the Aon Center, L.A.’s second tallest office tower, are one step closer to possibly converting the building’s top floors into residential condominiums.

Broadway Realty Partners LLC inked a seven-year lease renewal with Aon Corp., the building’s signature tenant, that reshuffles the insurance giant onto the 62-story tower’s lower floors.

Under the deal, Aon will retain building-top signage and lease 113,000 square feet only about half the amount the company originally took when it moved into the building 10 years ago.

Terms of the deal weren’t disclosed, but at going rates for downtown, the transaction’s total value to the landlord could be worth about $24 million.

“This represents the combination of the landlord wanting to retain flexibility with what they do at the top of the building and Aon wanting to stay in the property and still renovate their space,” said Todd Doney, a vice chairman with CB Richard Ellis Group Inc., which handles leasing at the building.

Retaining building-top signage was important to Aon in its decision to remain in the building, which is 90 percent occupied.

“Maintaining our prominent signage and building naming rights at the property was important,” said Sam Cargill, president and resident managing director of Aon Risk Services of Southern California. “We couldn’t be more pleased.”

Broadway Realty Partners is exploring plans to convert floors 51 through 60 into residential condominiums. The company, which bought the building last year for $192 million, is looking to get $50 million for the floors.

CB Richard Ellis’ Mark O’Brien assisted Doney in representing Broadway Realty Partners in the deal. Aon was represented by Jones Lang LaSalle’s Jeffrey Ingham and Jessica Kokish.

Checking Out


Carlyle Group is paying $45 million for the 368-room Radisson Los Angeles Westside.

The private equity firm has enlisted the Davidson Hotel Co. to manage the property, which will retain its Radisson flag and receive a $3.8-million renovation.

The Radisson’s original owner and developer, Robert Leonard, was the seller.

Even though the hotel is in a competitive market, the property has a chance to distinguish itself with the renovation, said Jordan Richman, a senior vice president in Grubb & Ellis Co.’s hospitality division.

“There is an opportunity to upgrade the property and Davidson is an excellent management company,” he said.

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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