If all goes to plan, Manulife will sell a downtown skyscraper to the Los Angeles Department of Water and Power for $92.5 million, according to a divestment announcement.
The TCW Tower deal has not closed — it needs city council approval and a signed purchase and sale agreement. Still, at that price tag the proposed trade would come out to about $129 per square foot. The deal could close during the second quarter, the announcement read.
The 35-story, 719,000-square-foot office tower located at 865 South Figueroa Street in downtown Los Angeles’ South Park district was about 46 percent occupied as of late December, per the announcement via Manulife US REIT, a Singapore-listed real estate investment trust.
The entity connected to the financial services giant anticipates an estimated net loss of around $10 million from the Figueroa divestment. It intends to put the net proceeds toward making an early repayment of Manulife US REIT’s outstanding loan due this year, according to the announcement.
LADWP is headquartered at the John Ferraro Building at 111 North Hope Street on Bunker Hill and did not immediately respond to a request for comment.
In October, Banc of California, one of the largest banks based in California, inked an 11-year lease for 40,000 square feet at 865 South Figueroa Street. Banc of California secured top signage rights at the tower, which is one of the tallest in the city, as part of the deal. The company’s name would replace the existing TCW logo after the asset management company left 189,000 square feet empty at the end of 2023. TCW relocated operations to about 140,000 square feet in one of the two towers of City National Plaza at 515 South Flower Street.
Downtown Los Angeles offices have a 34.4 percent vacancy rate, per the latest CBRE numbers. It is the poster-child for post-pandemic office distress, and it appears to still be in recalibration mode, where offices are mostly trading at or priced around $130 per square foot — but there are companies that are choosing to locate there and haven’t given up on downtown.
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