UPDATED, 10:25 p.m., April 6: It has long been rumored that Boston Properties, one of the largest landlords in New York City, was shopping for its first Los Angeles acquisition. In fact, the gossip persisted for years, with industry insiders claiming the firm was holding out for the perfect opportunity.
Now, it appears that Boston has found just the trophy property it was looking for in sunny Santa Monica.
The firm is in contract to buy Blackstone Group’s 50 percent stake in the six-building Colorado Center office complex for more than $500 million, according to sources with knowledge of the deal. It is the priciest single-property commercial sale to go down in L.A. County this year.
Boston is shelling out more than $900 a square foot for Blackstone’s half of the 1.1-million-square-foot campus at 2401-2501 Colorado Boulevard and 2400-2500 Broadway. The other half belongs to financial giant TIAA.
Sources told The Real Deal that Boston will manage and lease the property, which is roughly 75 percent occupied by tenants that include coveted tech company Hulu and Edmunds, according to CoStar. One of the buildings in the complex is fully vacant.
Average asking rent at the Center is $48 a square foot a year, or $4 a square foot month, according to CoStar. New leases are likely to bring rates higher than that average, which is below the going rate in Silicon Beach. The average asking rent for office space in Santa Monica was $5.12 a square foot a month in the first quarter, according to a report by Transwestern.
Blackstone cashed out more than any other seller of a single L.A. office property this year. Invesco just sold the Apollo at Rosecrans for $328 million after buying Runway Playa Vista earlier in the year for $475 million.
The only price tag to top the Colorado Center this year was for a multi-property deal sold by none other than Blackstone. Douglas Emmett and Qatar Investment Authority’s spent $1.3 billion to acquire Blackstone’s six-building Westwood office portfolio in February. It amounted to roughly $777 a square foot.
Blackstone purchased its stake in Colorado Center as part of a $39.2 billion portfolio sale in 2007. It acquired the 15-acre property, which encompasses an entire city block, from Equity Office.
Chris Houge, Tyler Jammet and Peter Best of LA Realty Partners are leasing brokers on the site, along with Randy Starr of Avison Young. The brokers may have also represented Blackstone in the sale of its stake, but could not be reached for comment.
Blackstone declined to comment on the transaction. Boston Properties could not immediately be reached for comment.
While the Santa Monica acquisition is Boston’s first in Los Angeles, it already has property in California, most notably the under-construction Salesforce Tower in San Francisco, which will be the second-tallest building on the West Coast.
Correction: A previous version of this story said Yahoo and Riot Games were tenants at Colorado Center. They are no longer at the property.