REITs Disposing Real Estate

Santa Monica-based Macerich has joined the parade of REITs selling off real estate, with the retail specialist dumping more than a billion dollars worth of property in the last year and a half.

And it isn’t through.

Macerich is now under contract to offload a mall in coastal Santa Barbara, which should close next quarter and command an $11 million price tag, the company said during a fourth-quarter and full-year earnings call, when chief executive Jack Hsieh touted the “path forward plan” he introduced two years ago when he snagged the corner office and set out to pay down debt.

Macerich sold a sprawling shopping center in the Long Beach suburb of Lakewood for $332 million, last year — a deal that included the buyer’s assumption of a $317 million loan, which was set to mature soon. That was an improvement from a year earlier, when the company surrendered its hometown Santa Monica Place mall to lenders after defaulting on a $300 million loan.

Macerich isn’t the only REIT in the L.A. area offloading real estate. Rexford’s recent earnings call included words on the industrial specialist’s plans to dispose of $400 million to $500 million of assets this year (it had already peddled seven properties for a total of $217.5 million in 2025). Kilroy, similarly, said it would continue to dispose of non-core real estate during its call after selling offices in Santa Monica, Hollywood and San Diego.

Victor Coleman’s Hudson Pacific Properties is next to report earnings, so stay tuned. Hudson Pac’s losses have been ballooning amid office and studio pain. It’s been sorting out its portfolio, too — in December it sold a Los Angeles office campus to its tenant at a price that allowed it to pay off the commercial mortgage-backed securities debt connected to the property.

On retainer

One California Plaza — the Bunker Hill office tower that Rising Realty Partners and DigitalBridge own but lost to a receiver after a $300 million default amid downtown Los Angeles’ distress — still brings Chris Rising’s outfit some revenue.

Receiver Trigild kept Rising Realty on to manage the million-square-foot tower downtown days after it was appointed by the court in late August. The latest receiver report notes Rising Realty Partners’ third-party property management business was paid $265,000 via a management fee for the five months ended December. JLL, responsible for leasing, made $90,000 during the same period, part of the tower’s total operating expenses, which amounted to almost $9 million.

Rising said he pitched the business at a discounted rate and because his team has a relationship with tenants. That’s good for bond holders and good for the receiver, who wants continuity, he said.

JLL, Trigild and an attorney for the receiver did not immediately respond to a request for comment.

Half price

The price of TruAmerica’s recent Luxe Villas and Haven Apartments purchase was previously undisclosed. The mystery is half-solved. Luxe Villas located in Brentwood traded for about $50 million, or more than $800,000 per unit. That covers the refinancing loan Gortikov Capital landed two years ago for the 60-unit property. How much Cityview sold its 97 units, called the Haven Apartments, in Culver City to TruAmerica is still unknown … for now. IPA’s Kevin Green, Joseph Grabiec and Gregory Harris brokered the deals.

More pain

Los Angeles’ office and hotel distress persists, whether it be Jade Enterprises’ loan backing Sawtelle offices landing in special servicing, or Grant King handing back the keys to a Hollywood hotel — his last in Tinseltown, where he dreamed of developing a mini-hotel empire.

The commercial mortgage-backed securities debt on the office building at 1950 Sawtelle Boulevard in West Los Angeles’ Sawtelle Japantown neighborhood went to special servicing after the borrower failed to pay it off at its January maturity date. The three-story, 100,000-square-foot, red-brick building was only 43 percent occupied last summer after its largest tenant reduced its space and another left.

Lender LCP Group snatched the trendy Dream Hollywood Hotel at 6417 Selma Avenue via a deed in lieu of foreclosure signed by King. He lost his other two Hollywood hotels, the Tommie and Thompson, to lenders, three years ago.