Trending
Another deal for KBS’ Union Bank Plaza falls through
Harbor Associates backs off $165M offer for 40-story office tower in DTLA
KBS Real Estate’s latest effort to sell the Union Bank Plaza in Downtown L.A. has fizzled, the second deal for the office tower to fall through in the past five years.
The company’s $165 million deal with Harbor Associates in Long Beach has been terminated, according to a Thursday SEC filing. KBS could not immediately be reached for comment.
Newport Beach-based KBS entered into a purchase and sale agreement with Harbor Associates in May to sell the 40-story, 702,000-square-foot property at 445 S. Figueroa St. Harbor Associates then had until June 16 to conduct due diligence on the building — where it would examine the physical and financial health of the property, among other factors.
Harbor Associates “did not deliver” KBS with a notice to proceed with the deal, and will now receive a refund for any deposits made, KBS disclosed in the SEC filing. It’s not immediately clear whether rising interest rates or some other factor concerning the building’s cash flow influenced Harbor’s decision.
The deal between KBS and Harbor Associates fell through a day after the Federal Reserve raised interest rates by three-quarters of a percentage point.
Harbor Associates, run by Joon Choi, has worked on a number of mixed-use projects in L.A. and in Colorado, though none the size of Union Bank Plaza. In L.A., the company recently redeveloped a 36,0000-square-foot building at 10281 West Pico Boulevard in Century City.
Choi’s decision to pull out of the deal came even at a price discounted heavily from a prior agreement that all fell through. In 2017, RC Acquisitions agreed to buy the tower for $280 million, but later backed out of the deal. KBS then quietly took the property off the market, until August of last year, when it lowered its asking price to $250 million.
The KBS investment trust that owns Union Bank Plaza, meanwhile, remains in the process of liquidating its assets. After selling off two office buildings in Tempe for $117.5 million in October, the firm offered in March to buy out shareholders of the trust using cash.