Hasta la vista! Vornado in contract to sell last LA asset to Northwood for $150M

Steve Roth of Vornado and 800 Corporate Pointe
Steve Roth of Vornado and 800 Corporate Pointe

It looks like Vornado Realty Trust’s anticipated exit from the Los Angeles market is almost complete.

Northwood Investors is in contract to buy a 243,000-square-foot Class A office property in Culver City from the New York-based real estate investment trust for approximately $150 million or $599 per square foot, according to information from Real Capital Analytics, though neither the buyer nor the seller was immediately available to confirm the deal.

One source familiar with the deal said the price was “astonishing” for the area.

The property at 800 Corporate Pointe is the last remaining L.A. property owned by Vornado, which paid $69.2 million for the complex in 2012, records show.

Kevin Shannon of Newmark Knight Frank represented Vornado in the deal. He declined to comment.

The property is 98 percent leased by tenants including Ares Management and Thomson Reuters. More than 20 percent of the property is occupied by tenants with leases that expire next year, meaning that Northwood can hike below-market rents when they expire, TRD reported.

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The move to sell the property is part of Vornado’s recent attempts to refocus its attention on New York office deals and limit distractions from its core focus.

“Roth is trying to simplify the company, make it more manageable, more focused and easier to understand,” said Sandler O’Neill analyst Alex Goldfarb of the company’s CEO Steve Roth when the building first came on the market in October. “Having two or three random investments in L.A. doesn’t help that at all.”

The company previously sold Beverly Connection, a West L.A. shopping center, for $260 million in 2014 and an office building at 520 Broadway in Santa Monica for about $91 million in 2015.

Meanwhile, Vornado is said to be one of three finalists in the running for a $1.7 billion contract to build a replacement FBI headquarters in Washington D.C. Roth is a longtime friend of President Donald Trump, and his partner at 1290 Avenue of the Americas in New York, and serves as an economic adviser to the administration.

Northwood was founded in 2006 by John Kukral, the former President and CEO of Blackstone Real Estate Advisors, according to its website. As of January 2017, it had approximately $6 billion of assets under management.