Anderson Upping Westwood Stake
By DANNY KING
Billionaire investor John Anderson is in escrow to purchase 10 Westwood buildings totaling 160,000 square feet of mostly retail property.
The estimated $60 million deal with a partnership led by Cincinnati-based Madison Marquette marks a homecoming of sorts for Anderson, who graduated from UCLA in 1940 and whose $15 million donation to the university’s business school in 1987 put his name on the institution.
“I bought my first suit in one of those buildings,” he said. “So I have some emotional ties.”
Duesenberg Investment Co., which he owns with his wife, Marion, is in escrow for the package of properties that was officially put on the market two weeks ago, although rumors of the offering circulated in September.
Besides Madison Marquette, which also manages the properties, the sellers include Credit Suisse First Boston and Malibu-based Christina Development Corp.
“I’ve entered into an agreement to buy everything but Copeland’s,” said Anderson, when reached in St. Thomas, Virgin Islands late last week. He said escrow was scheduled to close Nov. 20.
A spokesman for Madison Marquette said the company would have no comment. CSFB officials did not return calls.
The sale follows on a September deal in which the same partnership agreed to sell the 19,000-square-foot Copeland’s Sports building at 1001 Westwood Blvd. to Woonsocket, R.I.-based drugstore chain CVS Corp. for an undisclosed price.
“I’ve also entered into an agreement to buy the Copeland’s property in the event that that agreement (with CVS) is not fulfilled,” Anderson said.
He declined to disclose purchase price, but Matthew Sullivan, senior vice president at Colliers Seeley, who, with Colliers’ Michael Ross and David Norcott, are representing Madison Marquette on the deal, said the asking price on the portfolio, inclusive of Copeland’s, was “in the low $60 million range.”
Whether Madison Marquette will continue to manage the properties remains to be seen. In September, Joel Mayer, senior vice president at Madison Marquette, said the firm had wanted to retain management duties after the portfolio sale.
Also up in the air is the status of Christina Development, which sold most of its interest in the portfolio to Madison Marquette in 1998.
Larry Taylor, president of Christina, said he too had an offer on the table to buy out his partners. “I have made them an offer,” he said. “I don’t think anybody’s going to top what I offered because I already own part of it,” said Taylor.
Taylor, who had brought on Getty Center architect Richard Meier to create a renovation plan for the buildings in 1997 and is looking to do so again, would not disclose the amount of his offer but noted that he was expecting a response “any day now.”
If the Duesenberg deal goes through, it would mark its second in the Village in less than two months. In September, the Anderson vehicle bought the three village buildings at 1114-1134 Westwood Blvd. totaling more than 15,000 square feet for $6.3 million.
It also would mark the end of Madison Marquette’s four-year run as a Westwood Village property owner. In August, Madison Marquette sold its wholly owned Westwood Marketplace, the 212,000-square-foot retail center redeveloped from the old Bullocks/Macy’s complex last year, to Teachers Insurance and Annuity Association-College Retirement Equities Fund for about $75 million.
In 1997, Christina Development and Donaldson Lufkin & Jenrette Real Estate Capital Partners (which merged with CSFB in 2000) bought the properties from the Bornstein family for about $35 million, with Madison Marquette buying about a third of the overall equity interest from Christina for an undisclosed amount a year later.
Since then, the investment, like the Village itself, has had mixed results. The portfolio is 4 percent vacant, according to Sullivan. Overall, Village vacancies fell to about 4.5 percent in September from 15 percent five years ago, according to Bob Walsh, former executive director of Westwood Village Community Alliance, the business improvement district that was shut down in September when 5th District City Councilman Jack Weiss chose not to renew its contract.
After long periods of vacancy, both 1019 Westwood Blvd. and 1056 Westwood Blvd., two of the buildings included in the portfolio to be sold to Anderson, signed leases earlier this year. Corner Bakery Caf & #233; signed at 1019 Westwood Blvd., which had been vacant for a year, and Chili’s Grill & Bar signed at 1056 Westwood Blvd., vacant for three years.
The spotty results don’t faze Anderson, whose $370-plus per foot purchase would represent a capitalization rate of less than 7 percent.
“Westwood’s a good area,” said Anderson. “It’s not Rodeo Drive, but I’m not paying Rodeo prices.”