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WeWork’s first investor wins bidding war for Union Bank Plaza
The 40-story office tower goes into contract for third time in five years
Joel Schreiber, the first investor in WeWork, won a bidding war for the Union Bank Plaza in Downtown Los Angeles, The Real Deal has learned.
Schreiber, who heads New York firm Waterbridge Capital, beat four other buyers for the 40-story tower, according to a source with knowledge of the transaction. The deal comes just a month after a $165 million deal for the 701,888-square-foot office property fell through.
Waterbridge, through an affiliate called WB Union Plaza Holdings, signed an agreement to buy the property for $155 million, according to a filing with the Securities and Exchange Commission. The deal was signed on July 20. The seller is KBS Real Estate Investment Trust II controlled by Newport Beach-based KBS Real Estate.
This is the third deal for the office tower in the past five years. The property, located at 445 South Figueroa Street on Bunker Hill, was put on the market most recently in August with an asking price of $250 million.
The first near miss for the asset came in 2017, when RC Acquisitions agreed to buy the property for $280 million. RC later backed out of the deal. In another potential sale early this year, Harbor Associates was the buyer, but it fizzled out in June.
KBS announced a $20 million renovation for the property in 2019. Upgrades include a two-story retail level and an outdoor seating area with fire pits, according to a previous press release. MUFG Union Bank is one of the building’s main tenants. The bank, which occupies around 30 percent of the property, recently signed a 15-year lease extension.
Elsewhere in Los Angeles, Waterbridge has been dealing with issues with a lender at 801 South Broadway, also in Downtown L.A. That building, which was once slated for conversion into a “metaverse hub,” has sat mostly vacant for years. Since 2017, lender Berry Enterprises filed numerous notices to sell an equity position in the property. The latest notice, which Waterbridge’s attorney claims was “filed in error,” announced a May 26 auction with a minimum bid of $1.4 million.
The KBS Real Estate Investment II that owns Union Bank Plaza is currently in the process of liquidating its assets. In October, the firm sold two office buildings in Tempe, Arizona for nearly $118 million. Also, the firm has offered to buy out shareholders. The trust doesn’t own any properties in L.A. except Union Bank Plaza.
The sale is expected to close Oct. 19. If the deal fails to close, Waterbridge may have to pay $7.5 million in penalties.
Newmark, which brokered the deal, declined to comment.