The owners of two iconic office towers on downtown’s Bunker Hill now also own the land on which they sit.
In deals that closed late last month, Beacon Capital Partners purchased the land beneath One California Plaza for $33.43 million, and CIM Group purchased the parcel under Two California Plaza for $70 million, according to public records.
The parcels, part of a six-acre plot, were sold by CRA/LA, the former Community Redevelopment Agency for the city of Los Angeles. The entity, dismantled in 2012 amid state cutbacks ordered by Gov. Jerry Brown, began selling off its assets in 2015, assisted by Cushman & Wakefield’s Marc Renard, Manfred Schaub, and Jimmy Chai.
The portfolio of 50 assets included odd slices of land such as a 556-square-foot parcel in Pico-Union and a 25-square-foot land strip in Hermon. It also included prestigious sites such as the land beneath downtown’s Colburn School, the ArcLight Hollywood Parking Lot, and the land occupied by One and Two California Plaza.
The pair of sleek, blue towers at California Plaza was constructed on land owned by the CRA at a time when Bunker Hill was a nascent office market. One California Plaza was built in 1985 with 1 million square feet on 42 floors. Tenants today include Aecom, Morgan Lewis, Nixon Peabody, and Bank of the West. Two California Plaza was built in 1992 with 1.3 million square feet on 52 stories. Merrill Lynch, Reliance Steel, and BlackRock are among the companies now on its tenant roster.
Beacon and CIM have a 66-year lease on the buildings, paying an annual rent of $3.2 million.
“The bond-like nature of the 66-year ground leases and the extraordinary collateral of the office towers generated global investor interest in this offering,” said Renard, executive vice chairman of Cushman & Wakefield’s capital markets group, in a statement.
Despite that competition, Beacon and CIM seized their right of refusal to jump on the land, ending their days as tenants. Beacon had picked up its building for $144.5 million in 2013, and CIM swept in the following year to buy the neighboring tower for roughly $297.7 million.
Daina Beth Solomon can be reached at firstname.lastname@example.org. Follow her on Twitter @dainabethcita for the latest in L.A. real estate news.
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