A record price per square foot has been hit in the West Covina office market.
The Lakes, a two-building, Class A office complex, has changed hands for $58 million, or $333 per foot, in a deal that closed in mid-July.
Los Angeles-based Cornerstone Real Estate Advisers LLC purchased the 174,065-square-foot office complex from Ten West Associates LLC, a Los Angeles-based real estate investment group.
"You are buying the best building in the marketplace and even at that price you could not replace it for that number," said Bob Safai of Madison Partners, who represented both sides of the deal. "You couldn't build it for that number due to land and construction costs going up."
Cornerstone, a real estate advisory firm, purchased the property on behalf of an unnamed institutional client.
Ten West had owned the property for about a year. Rental rates are increasing rapidly in the area; currently the property rents at more than $2.75 per square foot per month, and rates are on the rise, Safai said.
The property is 98 percent occupied and counts Wells Fargo Bank and the Federal Bureau of Investigation as tenants. The buildings sit on over six acres of land and the property includes two man-made lakes and fountains. The twin four-story buildings were built in 1990.
Cornerstone did not return calls seeking comment.
A prominent Wilshire Boulevard landlord has purchased another office building on the well-traveled thoroughfare.
Jamison Properties Inc., the Los Angeles company operated by Korean real estate investor David Lee, has paid $39.2 million for the 10-story office tower at the northeast corner of Highland Avenue and Wilshire Boulevard.
The off-market deal with seller Copperfield Investment & Development Co. closed at the end of June.
The 168,680-square-foot building is located at 4929 Wilshire Blvd. in the Park Mile area and is about 98 percent leased. Lee's company owns nearly every high-rise office building on Wilshire Boulevard, from downtown to Western Avenue.
"This is a connector property that connects the Miracle Mile to his mid-Wilshire properties," said T.C. Macker of Coldwell Banker Commercial Westmac, who represented both sides of the deal.
The deal breaks down to about $232 per square foot. The average rental rate in the building is about $1.70 per square foot per month and now the asking rental rate is around $2.
Tenants include a variety of professional firms, such as law offices and financial advisers.
"You draw tenants that live in the immediate area. The location is very convenient for people who live in Hancock Park and Hollywood," Macker said. "These days wherever you live you don't want to travel a lot to work because of traffic concerns. (The property) is well positioned for future growth."
The 1973 building was in escrow for 11 months as Copperfield sold the building on a 1031 tax deferred exchange basis and worked over that period to identify another building to purchase. The company has yet to purchase another property.
David Thind and Patrick Sheekey of Coldwell Banker Commercial Westmac also represented both sides of the deal.
Blackstone Group LP has chosen Madison Partners as the leasing agent for several West Los Angeles buildings. The Los Angeles-based brokerage will serve as the agent for four Class A Westwood office buildings that the private equity firm acquired over the last year in purchases of Equity Office Properties Trust and CarrAmerica Realty Corp.
"They all have a nice sizeable amount of space," said Madison Partners principal Hunt Barnett.
The Westwood buildings total about 1.5 million square feet of space and include 21-story 1100 Glendon Ave., and three 24-story buildings at 10880, 10940 and 10960 Wilshire Blvd.
Vacancy rates at the building range from about 1 percent to 6 percent. Madison Partners will work with Equity Office leasing agents in buildings owned by that unit of Blackstone.
Additionally, Blackstone has tapped the real estate brokerage to act as the leasing agent for Santa Monica's Yahoo Center. The seven-building, 15-acre Class A property is located on Colorado Avenue.
Barnett, Rick Buckley, Chris Houge and Beau Rawi comprise the Madison Partners team that will lease the Westwood buildings. Buckley and Houge will lease Yahoo! Center.
Staff reporter Daniel Miller can be reached at email@example.com or (323) 549-5225, ext. 263.
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