We had news from across the geographic spectrum of the Los Angeles office world, with significant deals ranging from downtown to its outskirts and all the way west to Malibu. And it wasn’t all distress, so let’s start with the good news.
- Adam Rubin and Andrew Shanfeld’s Carolwood inked a 50,000-square-foot lease with Bank of Hope at its Aon Center, an office tower downtown that the private equity outfit purchased three years ago for about $148 million. Rubin and Shanfeld’s discounted deal came out to around $134 per square foot then. Since the Carolwood takeover, there have been a couple other notable leases at 707 Wilshire Boulevard: California Bank & Trust signed on for about 29,000 square feet and the Consulate General of India 21,000. Occupancy at the 1.1 million square-foot skyscraper is unknown. But those three leases amount to nine percent of the space, which isn’t nothing. On the Bank of Hope deal, a person familiar said it is a 15-year lease and has an option for another 20,000 square feet.
- Now to the not-so-good news: Chris Rising’s Rising Realty Partners defaulted on a $200 million loan on an office and data center at 1200 West 7th Street in City West. But, Rising is working with lenders to resolve the matter and keep control of the real estate. Rising Realty Partners, H.I.G. Realty Partners and Silverpeak Real Estate Partners purchased the 733,000-square-foot property for about $210 million, or around $286 per square foot in 2016. A person familiar believes it’s now worth about $100 million, or around $136 per square foot.
- Lastly: Weintraub Real Estate Group purchased a Malibu office campus from LaSalle Investment Management for $12.5 million, or about $320 per square foot. The 39,000 square-foot property at 22619 Pacific Coast Highway is on a coastal bluff, and still that’s less than half the $28 million it traded for almost a decade ago. But, it is more on a square footage basis than the $130 mark that keeps popping up downtown.
The deals tell us more of what we already know about Los Angeles’ office sector — there is a years-long, post-pandemic recalibration happening all over (no one is totally immune), and there are still companies that haven’t given up on downtown.
Caruso says look to the north
Speaking of Downtown Los Angeles, billionaire developer Rick Caruso said it is in decline and called it unconscionable in a recent social media post. But, he has an idea via Mayor Daniel Lurie’s San Francisco. Politicians should take empty storefronts and provide companies, retailers and restaurateurs grants to open shops temporarily. That’ll make streets more vibrant, and give people a reason to be there. Caruso called it easy and offered his help. But, of course, he said that has to happen in addition to solving the homeless crisis.
Mahan money
And speaking of Caruso, Politico recently ran an interesting story about his pick for governor that suggested Matt Mahan’s campaign had stalled. A veteran Democratic consultant said that “he might as well drop out,” and an anonymous backer said a few major donors have gotten cold feet in recent days. It’s too early to tell — and who knows, if it’s the tech money that’s running dry, there may still be L.A. real estate cash.
BPG 2.0
Barker Pacific Group, which recently purchased Sunset Media Center with Don Hankey’s Hankey Investment Company from Kilroy Realty for $61 million, has made some moves and shakes after the company’s founder Michael Barker passed away. That includes elevating Mark Handin to managing principal — and, more recently, putting co-CEOs and co-founders of Lion Real Estate Group Mory Barak and Jeff Weller on the board. Barak is now executive chairman of the BPG 2.0 (their words) board.
Tea leaves?
Paramount chief David Ellison, in a letter to lawmakers obtained by The Hollywood Reporter, concerning his $111 billion Warner Bros takeover proposal, wrote “my promise to you is to build a stronger Hollywood, by keeping both of these legacy studios operating separately.” He was touching on Hollywood jobs, but when it comes to the actual real estate, it could be a hint that he doesn’t plan on selling either the Warner Bros lot or the Paramount Pictures Studio lot. The millions of square feet the two studios occupy in Los Angeles but don’t own, that’s a different story. But, Ellison appears to be keeping the door open to more real estate in his hands.