Kilroy Realty sold a Santa Monica office building for $40 million, the company reported in its latest earnings release Monday. The June buyer is Washington Capital Management, property records indicate.
The real estate investment trust purchased the seven-story, 73,000-square-foot property at 501 Santa Monica Boulevard for more than $16 million in 1998, the Los Angeles Times reported at the time. The offices are only a couple blocks from the Third Street Promenade.
While West Los Angeles’ office market is faring better than Downtown Los Angeles’ in terms of vacancies, Kilroy’s Santa Monica office was only 65 percent occupied, according to the company’s first-quarter financial results. The property’s occupancy has been on the decline since the pandemic and subsequent remote work takeover, quarterly statements show. The building was 97.8 percent occupied in the first quarter of 2020.
Kilroy Realty did not immediately respond to a request for comment. Newmark represented Kilroy in the deal but declined to comment. Washington Capital Management confirmed that it purchased the property on behalf of a client.
Kilroy reported an increase in income to $68.4 million for the second quarter of the year from $49.2 million a year earlier. Funds from operations increased, too, to $135.9 million compared to $132.6 million during the same period.
“We are pleased to report on a strong quarter of execution across every facet of our business,” Kilroy CEO Angela Aman said in the release. “Leasing momentum accelerated during the quarter, resulting in over 400,000 square feet of lease executions. In addition, we were active on the capital recycling front, with significant progress recently made on both the monetization of land in our future development pipeline and on dispositions of non-strategic operating properties, as institutional interest in West Coast office assets continues to improve.”
Kilroy mentioned another Santa Monica office sale in its earnings release: the three-story, 190-square-foot office building at 1633 26th Street for $41 million, slated to close next year.
Editor’s note: This story was first published at 2:00 p.m. PDT. The timestamp above is not accurate.
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