A large lease deal has been completed at One California Plaza, a 42-story downtown L.A. high-rise that is up for sale by owners Maguire Properties Inc. and Macquarie Office Trust.
The 13-year lease with international law firm McKenna Long & Aldridge LLP for 62,418 square feet is worth more than $30 million and is one of the biggest downtown leases this year. With the deal, the 300 S. Grand Ave. tower is 78 percent leased.
The lease completes McKenna’s long flirtation with One California Plaza. Partner Thomas Abbott said that when the firm was moving to downtown from Mid-Wilshire in 1986, it tried to move into the building but didn’t complete the deal.
“It was sort of funny when we were looking at the market and this space came up, we said, ‘We know that building!” he recalled.
The firm is leaving 444 S. Flower St. because this year it acquired Brown Winfield Canzoneri Abram Inc., which has offices in One California Plaza, and wanted to consolidate, Abbott said.
The deal starts in the $1.80-$1.90-per-square-foot-per-month range, on a triple net basis, and includes rent escalations. Abbott said the financial terms of the lease are “substantially better” than the company’s lease at 444 South Flower. “It is a great market if you are a renter or a buyer.”
However, the lease is still a coup for beleaguered Maguire, which has seen occupancy levels fall amid the recession and has struggled paying back debt (see last item).
But, Maguire and Sydney, Australia-based Macquarie may not own the building much longer. It has been reported that the owners are in talks with New York-based Metropolitan Real Estate Investors LLC to sell the building. A Maguire spokeswoman confirmed the company is in negotiations with a buyer but did not elaborate.
Josh Wrobel represented Maguire in-house. Whitley Collins, Darren Eades, Tom McDonald and Tony Morales of Jones Lang LaSalle Inc. represented McKenna.
Apartment Sale
A two-story apartment building in a prime Beverly Hills location has traded hands for $3.11 million in a quick summer transaction.
The Ghatan Group, a Beverly Hills family-run real estate investment company, purchased the 12-unit building at 320 N. Crescent Drive from MRD Properties I LLC, the entity of an L.A. family’s real estate investment company.
The fully leased property, just blocks from Rodeo Drive and the center of Beverly Hills’ Golden Triangle, was listed June 4 and sold Aug. 4 despite the recession and tight credit markets.
Seller Rhoda Makoff of MRD Properties said that she sold the building because she lives in Santa Monica and prefers to own properties closer to home.
“I love the building. It’s a fabulous location. I wasn’t absolutely committed to selling, (but) I got my price,” said Makoff, who set a price floor at $3.1 million after listing it for $3.2 million.
The sale price for the 10,098-square-foot building breaks down to $259,167 per unit a robust figure.
Shawn Ghatan, who manages properties for his family-run company, noted that rents at the property are “somewhat below market,” but Beverly Hills’ rent control ordinance allows for generous 10 percent annual increases.
Broker Hamid Soroudi of Charles Dunn Co. represented both sides of the deal. Cari Widman, also of Charles Dunn, represented the seller.
Maguire Trends Up
The announcement from Maguire Properties in early August that it had defaulted on two properties, was on the brink of doing so on four others and was negotiating with lenders to give up the properties wasn’t good news.
So how did Wall Street react? Shares of the L.A. real estate investment trust are up about 69 percent since the Aug. 10 announcement.
Simply put, investors appear to likes Maguire’s plan to rid itself of the troubled properties.
Company spokeswoman Peggy Moretti said Maguire is in talks with lenders but nothing has been consummated yet.
Four of the office properties were Orange County assets acquired in the company’s ill-timed $3 billion portfolio purchase from Blackstone Group in February 2007. The lone L.A. property is 550 S. Hope St.
Shares of Maguire, the largest owner and operator of Class A office buildings downtown, closed at $1.10 on Aug. 27. Shares hit a low of 65 cents on the day of the announcement.
Staff reporter Daniel Miller can be reached at [email protected] or (323) 549-5225, ext. 263.
