In what would be the largest sale of a downtown L.A. office building since 2008, CBRE Global Investors, an affiliate of CBRE Group Inc., is under contract to buy a property at 400 S. Hope St. for $240 million, sources told the Business Journal.
Tishman Speyer has owned the 26-story, 701,000-square-foot building since 2005, when it was acquired for $245 million.
The Class A red granite tower was built in 1982 and is 80 percent leased to tenants that include law firm O’Melveny & Myers LLP, management consulting firm McKinsey & Co. and Bank of New York Mellon Corp.
The last building to sell for more than $240 million was the Citibank Center at 444 S. Flower St., which sold in 2008 for about $275 million, or about $308 a square foot. The 400 S. Hope property is going for about $342 a square foot, the highest per-square-foot price since 2007, when Hines bought 624 S. Grand Ave. for $433 a square foot, or $287 million total.
“From the comparables, it looks like Tishman got a great deal after the greatest real estate downturn of our time, having lost only $5 million after buying near the height,” said Adam Tischer, vice president of brokerage Colliers International in downtown, who is not involved in the deal.
It’s not clear why Tishman is selling the building. Industry sources told the Business Journal that CBRE is considering moving out of its current office at MPG Office Trust Inc.’s KMPG Tower at 355 S. Grand when its lease expires in January. The top two floors of 400 S. Hope are vacant.
The deal is expected to close next month. It will be the only office building that CBRE owns in downtown.
CBRE, which is representing its affiliate in the acquisition, did not return calls for comment. Tishman representatives were not available for comment.
Private commercial real estate investment group Cresta Properties LLC has acquired two L.A.-area apartment buildings in separate off-market deals.
The buildings, nearly fully occupied, sold for a combined $6.5 million.
SDJ5 Properties LLC sold the first property, at 406-412 S. Rampart Blvd. in Koreatown, last month for $3.3 million. The three-story, 60-unit building has studios and one-bedrooms ranging from 500 to 800 square feet.
AEA Hollywood LLC sold the other building, at 1760 El Cerrito Place in Hollywood, this month. The two-story, 21-unit building has studios, and one- and two-bedroom units ranging from 800 to 1,000 square feet.
Cresta is aggressively boosting its multifamily portfolio in Los Angeles. Over the past six months, the company spent $30 million to buy eight apartment buildings totaling 210 units. It is under contract to buy additional property worth $15 million.
Reuben Robin, a Cresta principal, said the company looks for properties that need to be restructured or redeveloped then improves them.
“We see demand for rental units in Los Angeles in general, and in our particular niche specifically, staying strong for several years,” he said in a statement.
Both properties will be managed by TRG real estate services of Los Angeles.
Guillermo Ma from TRG represented both sides of the Rampart deal. Tony Azzi of Marcus & Millichap Real Estate Investment Services represented both sides of the El Cerrito deal.
Chris Wilson, founder of L.A. brokerage Wilson Commercial Real Estate, teamed up last week with L.A. development company Champion Real Estate Co. to form a joint venture.
The new company, Champion Wilson Retail, plans to commit $50 million of equity toward the acquisition of $200 million worth of properties over three years. It will target retail and mixed-use complexes in urban neighborhoods ripe for improvements. Its price target is $10 million to $100 million. It also hopes to revive retail projects abandoned after the state dissolved redevelopment agencies.
Wilson is leading the venture, but both he and Champion founder Bob Champion will continue operating their separate companies.
“This is an exciting time in the retail industry, and I am looking forward to working with Bob and his team on this venture,” Wilson said.
Wilson Commercial Real Estate handles leasing at retail projects, including the Glendale Marketplace across from Americana at Brand. Champion recently purchased a Hollywood parking lot near Musso & Frank Grill for a mixed-use project.
Staff reporter Jacquelyn Ryan can be reached at firstname.lastname@example.org or (323) 549-5225, ext. 228.
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