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The Real Deal Los Angeles

Douglas Emmett’s SaMo deal is latest in partnership with Qataris

QIA has said it plans to invest $35 billion in North America over the next 5 years

September 28, 2016 09:30AM

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Sheikh Abdullah bin Mohammed bin Saud Al Thani and the Searise Office Tower at

Sheikh Abdullah bin Mohammed bin Saud Al Thani and the Searise Office Tower at 233 Wilshire Boulevard

Santa Monica-based REIT Douglas Emmett’s recent purchase of a nine-story Santa Monica office building for $139 million represents the latest in the company’s growing relationship with the Qatar Investment Authority, the sovereign wealth fund which recently bought a stake in the company that owns New York’s Empire State Building.

The deal is one in a string of major transactions completed by QIA over the past year. Just last month, QIA said it had acquired a stake in the iconic Manhattan tower through a $622 million deal for a minority stake in its owner, publicly-traded Empire State Realty Trust. An affiliate of QIA now owns 9.9 percent of the REIT.

The fund has said it plans to invest $35 billion in North America over the next five years in a move towards diversifying its portfolio outside of Europe and recently opened an office in New York in order to source deals on the ground.

The Santa Monica property, at 233 Wilshire Boulevard, is owned by an existing consolidated joint venture with institutional investors including QIA, according to a release distributed by Douglas Emmett.  That joint venture, which also acquired 12100 Wilshire Boulevard in July, borrowed $56 million for the purchase, the company said.

As part of the deal, Douglas Emmett reduced its equity in the joint venture to 20 percent by selling a portion of its interest to another sovereign wealth fund investor, according to the release. The other sovereign wealth fund was not identified.

The Santa Monica transactions were separate from the QIA and Douglas Emmett joint venture that acquired four buildings, at 10960, 10940 and 10880 Wilshire Boulevard and 1100 Glendon Avenue in Westwood in February. Douglas Emmett currently holds a 30 percent capital interest in those properties, the company said.

QIA, created in 2005 to manage Qatar’s oil and natural gas profits, is private and  declines to disclose the extent of its holdings. — Katherine Clarke

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