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The Real Deal Los Angeles

Blackstone lists 1299 Ocean for sale in Santa Monica, expects to fetch record ppsf: sources

Building with ocean view could send landlords, including Douglas Emmett, into a bidding war
By Hannah Miet | February 15, 2017 11:30AM

1299 Ocean Avenue

A division of Blackstone Group is quietly shopping a much sought after oceanfront office property in Santa Monica ― and it could sell for a record per-square-foot price, The Real Deal has learned.

The 11-story, 205,0000-square-foot Wilshire Palisades building at 1299 Ocean Avenue is expected to sell for more than $238 million, or $1,165 a square foot, according to sources with knowledge of the bidding. That figure represents the highest per-square-foot sale price in Santa Monica’s history. The previous record of $1,165 was set by Oracle’s purchase of 2700 Colorado late last year.

Eastdil Secured has the listing, but the brokers could not be reached for comment. Sources said the property is being shopped to only a select pool of buyers and it was not clear if there is an official asking price.

Those vying for the property include Douglas Emmett Inc., Boston Properties and the Irvine Company, sources said, though those firms did not immediately respond to requests for comment.

Douglas Emmett is said to be particularly interested and is rumored to have the Qatar Investment Authority — its joint venture partner on a $1.34 billion acquisition of a Westside office portfolio from Blackstone last year — in tow. Many in the industry suspect DEI, known for paying high prices and holding assets long-term, could come out victorious.

On an fourth quarter earnings call last week, DEI CIO Kevin Crummy said the firm is open to acquiring another Blackstone property, but is also looking at other sellers’ portfolios.

“There is other stuff out there besides Blackstone,” Crummy said. “I feel like we keep talking about Blackstone and ignoring all the other owners in the marketplace, but we did buy a building from Hines last year.”

Katherine Clarke contributed reporting.