After about a year of suffering through plummeting values, the office market in Downtown Los Angeles has received a bit of good news with the University of California, Los Angeles announcing its purchase of the historically designated The Trust Building.
The school will use the building at 433 South Spring Street in Downtown’s Historic Core as a site for satellite classes.
UCLA declined to state how much it paid for the 300,000-square-foot, 11-story, Art Deco building. But people familiar with the deal placed the transaction under $40 million, less than half of the building’s assessed value of about $88 million, according to the Los Angeles Times, which first reported the story.
The sellers, Rising Realty Partners and its financial partner Lionstone Investments, bought the building in 2016 for $80.4 million. Rising Realty also financed a $40 million revamp of the building which included restoring original Art Deco features and bringing it up to modern earthquake safety standards. Star chef José Andrés is expected to open a restaurant and bar on The Trust Building’s rooftop later this year.
Rising Realty struggled to find renters and buyers for The Trust Building. In 2021, a $1 million bonus was offered to brokers who could close a deal for a tenant who would lease 100,000 square feet on the premises.
Despite the price discount, UCLA’s purchase indicates that Downtown Los Angeles’ days as an office hub are not over, according to Mike Condon Jr. of Cushman & Wakefield, who represented the seller in the transaction.
“After several years of nothing but negative news surrounding Downtown Los Angeles, the UCLA acquisition of the Trust appears to be one of the first green shoots towards recovery,” Condon said.
– Andrew Asch
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