UCLA Health lease adds big value on $33.4M NoHO office

A medical office building in North Hollywood that’s fully leased to UCLA’s health system has traded hands for nearly three times more than it last sold for in 2018.

Principal Real Estate Investors bought a 34,000-square-foot medical office building in North Hollywood from GPI Companies, according to an announcement from JLL, which brokered the deal.

Records show that Principal Real Estate paid $33.4 million for the building — nearly $1,000 per square foot, and almost three times more than the $11.6 million GPI Companies paid for it in 2018.

Located at 4343 Lankershim Boulevard, the property was vacant when GPI Companies took ownership. It signed UCLA Health, which includes four hospitals and numerous clinics and medical offices in the Los Angeles area, to lease all the space shortly after it acquired the building.

GPI Companies has been active across Los Angeles in recent months, paying $92 million for a 200,000-square-foot complex in North Hollywood’s Arts District, and buying a 51,000-square-foot medical office building in Burbank for $23.9 million.

With its purchase, Principal Real Estate “has the ability to build a long-term relationship with the tenant as they continue to expand their footprint,” JLL’s Andrew Milne said in a statement.

Principal Real Estate, a subsidiary of insurance firm Principal Financial Group, manages around $98 billion in real estate assets globally, with private assets comprising two-thirds of that, according to its most recent earnings report.

In the U.S., it reported $1.9 billion in equity real estate investments in the second quarter of this year, with 45 percent of these assets located in the Pacific states, including California, Oregon and Washington.