KBS’ deal to sell Union Bank Plaza to Joel Schreiber delayed for 9th time
Joel Schreiber closes on Union Bank Plaza sale to beat tax deadline
With final asset sold in $110M deal, KBS fund plans to liquidate
UPDATED, March 31, 2023, 9:54 a.m.: Joel Schreiber’s Waterbridge Capital has closed a deal to purchase the 40-story Union Bank Plaza in Downtown L.A. from KBS, just more than a day before the city of L.A.’s new transfer taxes go into effect.
Waterbridge paid $110 million, or about $158 per square foot, for the property, after nine months of delays, according to KBS. The building was sold at $104 million and the buyer also assumed about $6 million in capital commitments to existing tenants in the building, according to KBS’ Giovanni Cordoves. Kevin Shannon at Newmark brokered the deal on behalf of KBS.
Waterbridge bought the property using a $75 million acquisition loan from Steve Gozini’s BH Properties, a real estate investment firm based in West L.A., according to an announcement from Colliers. A Colliers team led by Sean Fulp and Mark Schuessler helped Schreiber land the financing. Schreiber declined to comment.
KBS Real Estate Investment II has marketed the tower at 445 South Figueroa Street for sale since 2017, eyeing $250 million for the 701,000-square-foot property in 2021.
But that price didn’t hold. Schreiber’s Waterbridge Capital first went into contract to purchase the office tower in July for $155 million.
KBS had offered a $13 million credit to Waterbridge if the sale was completed by March 29, according to filings with the Securities & Exchange Commission, but it’s unclear whether that was granted, since the deal closed on March 30.
But the deal has been plagued by delays since then, though Schreiber continued to put down more in deposits. He scored 11 extensions on the deal, which allowed him to negotiate a lower price over the course of time.
By closing before the new transfer tax goes into effect on April 1, KBS saved $6.1 million.
With the sale, KBS Real Estate Investment Trust II will have no properties left on its books, allowing it to proceed with a plan to liquidate, according to SEC filings.
Schreiber, who is known for being the first investor in WeWork, tried his hand at another L.A. office property, the Broadway Trade Center, but lost it to Starwood in a foreclosure last year.
In lawsuits, Schreiber himself has admitted to facing general liquidity issues — in a 2018 deposition, he said he had less than $1 million in liquidity. He has also faced litigation from Goldman Sachs, which alleged he over pledged his WeWork stock in order to secure a loan from the investment bank.