More on Sunset Media Center

Kilroy Realty has made another move to reshape its portfolio, shedding another not-so-occupied property as the company faces a wave of lease expirations.

The deal for the Sunset Media Center looks like a discount for joint venture Hankey Investment Company — owned by billionaire Don Hankey, who put up President Donald Trump’s $175 million bond in his New York civil fraud case — and Barker Pacific Group.

The new owners paid $61 million for the 22-story, 326,000 square foot office, which comes to about $187 a square foot, with a Measure ULA tax bill of $3.6 million, according to property records. Located at 6255 West Sunset Boulevard in the heart of Hollywood — about two blocks from the Walk of Fame — the property is 51 percent occupied.

Hankey funded the debt for the purchase but amount was not disclosed; per the deed of trust, it is a $42 million note.

Kilroy’s Los Angeles portfolio encompassed 53 properties, more than 4.5 million square feet of rentable space, and was 74 percent occupied, as of the quarter ended Sept. 30, 2025. In Los Angeles, 42 leases that amount to 507,000 square feet, or about 4 percent of its leased space, are set to expire this year.

Kilroy sold a Santa Monica office building that was only 65 percent occupied last July. Then the real estate investment trust purchased Maple Plaza, a Beverly Hills office campus that was 75 percent leased at the time and marked the company’s entry to the wealthy enclave — and may have given chief executive Angela Aman one of her better earnings call talking points since she took the corner office. Maple Plaza, she said on a third-quarter earnings call, had “become the strongest driver of leasing activity in our Los Angeles portfolio.”

The latest sale took Kilroy back to trimming inventory — and time will tell which way the REIT will lean on deals in 2026.

Calendar item

Speaking of 2026 … Happy New Year! You know what that means? Earnings season, annual reports and proxies. Time to see how Los Angeles’ publicly traded commercial real estate companies fared, and how much they paid their executives. Stay tuned.

Good news out of the Valley

In Oct. 2025, The Real Deal wrote the Encino Financial Center, a 13-story office building owned by Lowe Enterprises, received an appraisal that reduced its value by almost a third. That was after its loan landed in special servicing due to imminent monetary default. The nearly 230,000-square-foot office building at 16133 Ventura Boulevard is still valued at about $49 million compared to $72 million at loan issuance in February 2015, which is more than the $39 million debt connected to the property.

But a loan modification was closed, and the note was extended to Nov. 2026, according to Morningstar, which buys Lowe more time. The borrower funded $2.5 million in new capital as part of the modification terms, per Morningstar. And, the three largest tenants, all of which had lease expirations next year, have extended their leases.

El Segundo trade

Downtown Los Angeles offices are still bumping along bottom, and even discounted deals are commanding pricier amounts on a per square foot basis in submarkets beyond the city’s center. Take Majestic Asset Management and AVG Partners’ recent El Segundo buy. The three-story office building traded hands for $121.5 million, or about $405 a square foot.

That is less than the $170 million, or about $560 per square foot, Ocean West Capital Partners and Lionstone Investments purchased the real estate at 777 South Aviation Boulevard for pre-pandemic. But it is more per square foot, than the priciest office trade last year: Uncommon Developers’ purchase of a Brookfield-owned downtown skyscraper for $210 million, or $201 a square foot.

El Segundo’s office sector is nowhere near as distressed as downtown’s, but isn’t as prosperous as Century City’s either.

Blackstone checks out

Blackstone ditched an extended-stay, Marriott-branded hotel in Torrance, near Redondo Beach, for about $54 million, or roughly $218,000 per key. The buyer of the Residence Inn at 3701 Torrance Boulevard is Capital Insight.

On a per room basis, in Los Angeles County, it isn’t as distressed as it could be, but still reflects an ongoing hospitality rut. It’s more than lender Corten Real Estate Partners’ purchase, via auction, of the Line in Koreatown for $68 million, or $177,000 a room — but less than Pebblebrook Hotel Trust’s sale of the Montrose in West Hollywood for roughly $44 million, or about $333,000 a room.