Douglas Emmett REIT Buys $610M L.A. Portfolio
- Mar 27, 2008
In a market where employers are forecast to create 23,000 jobs in 2008, REIT Douglas Emmett Inc. has acquired a 1.4 million-square-foot office portfolio consisting of six Class A buildings in the Los Angeles area for $610 million. Working out at $428 per square-foot, the portfolio is currently 88.7 percent leased. The properties acquired include 2001Wilshire Boulevard in Santa Monica (pictured); 9100 Wilshire Boulevard and 8383 Wilshire Boulevard in Beverly Hills; 15250 Ventura Boulevard and 16000 Ventura Boulevard in Sherman Oaks/Encino; and 21300 Victory Boulevard in Warner Center/Woodland Hills. When reached by CPN, a Douglas Emmett spokesperson declined comment. This transaction doubled the square footage the company controls in the Beverly Hills submarket. The firm plans to make significant repositioning capital improvements to a number of the buildings in the portfolio. An affiliate of the seller provided $380 million of first trust deed bridge financing for nine months. L.A.-area office-using employment growth is forecast at 0.4 percent, or 4,200 new hires, according to Marcus & Millichap’s 2008 annual report for the Los Angeles market. Office investors will continue to target assets in Los Angeles County this year, however, velocity may slow due to tighter underwriting standards, the report stated. Douglas Emmett’s total commercial portfolio now consists of 54 office properties totaling approximately 13.2 million rentable square feet, an increase of 11.8 percent as a result of this acquisition. In late February, the REIT acquired a 78,300-square-foot office building located at 932 Ward Avenue in Honolulu, Hawaii. As part of the same transaction, Douglas Emmett also acquired all of the assets of The Honolulu Club, a private membership athletic and social club, which is located in the building. The aggregate contract price was approximately $18 million and the purchase was made in a joint venture with Richard Gushman, who has served as Douglas Emmett’s local partner on most of its prior Hawaii acquisitions.