Pricey office deals picked up in Los Angeles from a post-pandemic slump during the first six months of this year before coming to a screeching halt after the Federal Reserve Bank started hiking interest rates.
The top two sales of 2022 were traditional office buildings, but also efforts to refinance office properties. In both cases, owners brought in joint venture partners for new equity.
All of this year’s top 10 deals closed at a time when employers were hoping to bring workers back to the office by Labor Day — a date that came and went without any meaningful shift in office vacancy. About a quarter of all office space was available at the end of September, according to Savills, up about a percentage point from the end of 2021.
Here are the top 10 office sales across Los Angeles County this year:
1. One Culver | Blackstone Real Estate Income Trust | $510 million
Blackstone Real Estate Income Trust bought a stake in One Culver for $510 million marking this year’s most expensive deal. LBA Realty brought in Blackstone as a joint venture partner to refinance the property. Newmark brokered the deal on behalf of LBA Realty.
One Culver, which is located at 10000 Washington Boulevard, has about 325,000 square feet of office space, three soundstages and about 15,000 square feet of retail. Apple, Equinox, Amazon-owned One Medical and WeWork all lease space at the property.
The deal came out to around $1,290 per square foot — the top price per square foot this year across L.A. — though it’s not clear how much of a stake Blackstone bought.
3. 555 South Aviation Boulevard | Rialto Capital Management | $205.5 million
Marking the top sale in L.A.’s South Bay, Rialto Capital Management bought a roughly 260,000-square-foot office property in El Segundo in June for $205.5 million, or about $790 per square foot. Excluding joint venture deals, the deal marked the most expensive sale of an office property in L.A. County this year.
Tishman Speyer sold the property after holding it for seven years. The firm bought the building — then a single-story industrial and distribution complex leased by Xerox — for $45 million and spent a further $44 million to redevelop the structure into office space.
The building is fully leased by consumer tech firm Belkin International, ad agency Publicis and workout wear brand Fabletics.
4. 21555 Oxnard Street | Stan Kroenke | $175 million
The owner of the Los Angeles Rams, Stan Kroenke, bought a 13-story office building in Woodland Hills for $175 million, where he’s expected to build a sports-oriented development, complete with a training center for the football team.
In June, Kroenke bought a roughly 32-acre parking lot and a 430,000-square-foot office building from investment firm Ares Management. CBRE, which brokered the deal on behalf of both Kroenke and Ares, noted the deal was sold for land value. Anthem Blue Cross, the health insurance firm, formerly leased the property, but it’s now vacant.
Across the street, Kroenke bought the shuttered Promenade at Woodland Hills shopping mall for $150 million in March.
5. 6311 Romaine Street | Bardas Investment Group | $135 million
In Hollywood, Bardas Investment Group bought a 238,000-square-foot studio property at 6311 Romaine Street in March for $135 million, or about $566 per square foot. Bardas is now planning to spend more than $600 million to redevelop the property, which formerly housed studios for Technicolor and Metro Pictures.
Bardas plans to build a 620,000-square-foot studio and office complex, with parking for about 1,000 cars. Construction is set to take two years.
L.A.-based investor BLT Enterprises sold the property, with brokerage assistance from Lee & Associates.
6. 5500 West Jefferson Boulevard | Nuveen | $105.5 million
In one of the more expensive deals to trade on a square-foot basis, Nuveen paid $105.5 million for a property near Culver City that is fully leased to Apple. That works about to about $1,200 per square foot.
Hackman Capital sold the property in March, after scoring Apple as a tenant in 2017. Eastdil Secured brokered the deal on behalf of Hackman.
The 85,000-square-foot building is located at 5500 West Jefferson Boulevard.
Hackman has pivoted to owning more studio properties over the last couple of years and is currently developing a 1.8-million-square-foot property at the former CBS Television City complex in Fairfax.
7. 6922 Hollywood Boulevard | Harbor Associates | $96 million
Harbor Associates’ $96 million purchase of a 205,000-square-foot building right on the Hollywood Walk of Fame was one of the only top deals to trade in the last six months of 2022.
Harbor bought the property at 6922 Hollywood Boulevard in October from Hudson Pacific Properties for about $468 per square foot, Trailer Park Group, a movie trailer and advertising firm that works with major productions studios, leases about 103,000 square feet at the property.
Hudson Pacific made a small profit on the sale — it bought the building for $92.5 million in 2011.
8. Hollywood Netflix Media Campus | The Georgetown Company | $93 million
Marking the most expensive deal among the top 10 sales on a per square foot basis, New York-based firm The Georgetown Company bought a Hollywood building fully leased to Netflix for $93 million, or $1,350 a square foot.
In February, a joint venture between the U.S. subsidiary of Chinese real estate firm Gemdale and LaTerra Development sold the property, after originally marketing it for sale in 2021 for about $90 million. Newmark brokered the deal on behalf of the sellers.
The 75,600-square-foot property is located at 5808 Sunset Boulevard. The sale included land for additional development. At the time the property was put on the market, Newmark said the complex could accommodate another 109,000 square feet of development.
9. 301 East Ocean Boulevard | Jack Sitt Real Estate and Assa Properties | $85.5 million
Jack Sitt Real Estate and Assa Properties bought the leasehold interest in an office tower in Long Beach for $85.5 million, or about $220 per square foot.
The duo purchased the leasehold on the 389,000-square-foot tower in January from Parallel Capital Partners. Parallel still owns the ground lease on the building, which expires in more than 90 years. Payments on the ground lease increase 3 percent annually through 2044, after which increases fall to 1.5 percent.
10. 3440 Lomita Boulevard | Cedars-Sinai | $70 million
Rounding out this year’s top 10 sales was Cedars-Sinai’s $70 million purchase of a medical office property in Torrance, which came out to about $519 per square foot.
Tormed Medical Buildings, owned by David Buxton, sold the 135,000-square-foot building at 3440 Lomita Boulevard in April. Steve Miller Company brokered the deal on behalf of Buxton’s firm.