Not surprisingly, 2020 was an all-around rough year for the Los Angeles office market.
With white-collar workers ordered to stay home during the pandemic, office buildings emptied out, with sales activity plummeting — along with leasing — and sublease activity jumping.
Office market market vacancy hit 15 percent in the third quarter, and leasing activity fell to its lowest point in a decade, according to CBRE. In November, CBRE itself announced it would shift its global headquarters from L.A. to Dallas.
But 2020 did see several big office sales. The five largest combined for $1.2 billion, with Silverstein Properties’ purchase of US Bank Tower coming in at No. 1. The pandemic, however, had a withering effect on the final price of that deal. The Covid effect was also clear from a quick scan of the list, which included three deals that closed in February, before the virus took hold.
Because the list of biggest office investment sales in 2020 only includes closed deals, JH Snyder’s recent sale of 959 West complex for $186 million is not included. That deal — LPC West and Russell Geyser was the buyer — hasn’t hit property records yet.
1. US Bank Tower — Silverstein Properties | $430M | DTLA
“I believe in the future of downtown Los Angeles.”
So said Larry Silverstein, chairman of Silverstein Properties, after he purchased the 73-story U.S. Bank tower at 633 W. 5th Street in July. The New York-based company bought the 1.4 million square foot property from OUE Limited, a Singapore-based investment management firm.
The final price reflects the recent arc of office building values. OUE purchased the building for $368 million in 2013, and before the pandemic hit, valued the property at $633 million. OUE acknowledged it had to significantly reduce its asking price to close the deal.
2. 5900 Wilshire — Rockpoint Group | $303M | Miracle Mile
Rockpoint Group purchased the 30-story building in February from a partnership of PGIM Real Estate, Ratkovich Company and AXA Capital.
The 493,000-square-foot building at 5900 Wilshire Boulevard, across the street from the Los Angeles County Museum of Art and LaBrea Tar Pits, is one of several big-ticket properties on the block that sold in recent years.
Boston-based Rockpoint purchased a tower at 5670 Wilshire Boulevard from Blackstone Group for $215 million in 2017. And in 2018, Onni Group paid Tishman Speyer $628 million for properties at 5700 and 5750 Wilshire boulevards.
3. Jefferson Creative Campus — Lincoln Property Co., Clarion Partners | $169M | Baldwin Hills/Crenshaw
This was the biggest office investment sale in L.A. in a designated Opportunity Zone.
Rader Properties Group and Rodeo Properties sold the 152,000-square-foot complex in February after renovating it for office space. Lincoln Property Company and Clarion Partners teamed up on the purchase.
4. Office campus — Northwestern Mutual | $166M | Santa Monica
This is another big sale that went down in February. Northwestern Mutual bought the four-building office campus at 2041-2115 Colorado Avenue, with tenants that include Universal Music Group.
Lincoln Property Company and Northwood Investors sold the 92,000-square-feet property.
5. Starwood Capital Group and Artisan Realty | $127M | El Segundo
Brookfield Asset Management sold this 260,000-square-foot office building at 1960 East Grand Avenue. The firm came away with a tidy profit after having paid $67 million for the property in 2017.
The timing of the deal also helped. Brookfield sold the building in — you guessed it — February.