The Real Deal Los Angeles

Hines sells 5 LNR Warner Center buildings to Oaktree Capital for $235.5M

Hines will continue to lease the campus: sources
By Hannah Miet | February 10, 2017 06:31PM

A building at LNR Warner Center and Oaktree CEO Jay Wintrob (via Hines, Oaktree)

Buildings in Warner Center are selling like hotcakes.

First, Starwood sold its two Warner Center buildings to a partnership between Angelo, Gordon & Co. and Lincoln Property Company for $150 million, or $295 a square foot, in October. Now, Hines has sold an earlier phase of the master-planned office campus, The Real Deal has learned.

Los Angeles-based investment firm Oaktree Capital Management, led by CEO Jay Wintrob, purchased five office buildings totaling 808,050 square feet — in addition to two parking structures — from Hines for $235.5 million, or $291 a square foot, in a deal that closed earlier this week, RCA shows.

Oaktree does not operate the properties it invests in and typically brings on a partner. In this case, Hines will continue to lease the property, collecting fee income, sources told TRD.

Eastdil Secured brokered the deal for the buildings at 2127, 21281 and 21301 Burbank Boulevard, as well as 5700 and 5820 Canoga Avenue. A representative of the brokerage could not be reached for comment.

The property is 99 percent leased, CoStar shows. Tenants include Health Net of California, which occupies more than 40 percent of the complex.

Hines interests bought LNR Warner Center for $311 million in 2006 as part of its joint venture with Japan’s Sumitomo Life Realty.

Hines was rumored to have put the property up for sale amid speculation of a loan default, TRD reported in September. 

A $174 million CMBS loan attached to the property was transferred to special servicing due to the possibility of a default, according to CMBS data analytics firm Trepp. A spokesperson for Hines said the loan was transferred “for purposes of discussing a potential extension.”

The price-per-square foot price on the sale to Oaktree was roughly on par with the other portion of the campus that recently traded, and with other Class A office deals in the area.
Representatives of Hines and Oaktree did not respond to requests for comment.