Office Property Sales Dominate Los Angeles Real Estate Market
- May 05, 2011
By Alex Girda, Associate Editor
Los Angeles’ office sector continues to outperform the rest of the area’s real estate market, with property sales front and center. Office sales culminated this week with Majestic Investments’ purchase of a San Fernando Valley complex for $49.5 million. Located at 15350 and 15400 Sherman Way, Sherman Plaza is a two-building, 268,000-square-foot Class A asset. Built by Decron Properties in the 1980s, it was sold by Embarcadero Capital Partners. The property is 95 percent leased, generating consistent cash flow from tenants such as the State of California Franchise Tax Board and North L.A. County Regional. The property’s on-site parking also generates steady income from monthly agreements with tenants.
Other recent sales have included MPG Office Trust’s disposition of 550 S. Hope in downtown L.A. to LBA Realty, in cooperation with the special servicer on the mortgage loan, according to RenTV (www.rentv.com), which just produced an overview of the L.A.-area office real estate sector. MPG is now relieved of its obligation to repay a $200 million mortgage loan, along with contractual and default interest.
A smaller sale was that of a Class A office building at 2300 E. Imperial Hwy. in El Segundo. The value of the transaction–made between a financial services firm, the seller and buyer V.C.I. Corp. of Indonesia–totaled $25.3 million. The deal for the 1964-built, 157,000-square-foot office complex was mediated by Cushman & Wakefield representatives.
In big leasing deals, OEwaves has expanded in Pasadena by signing a 64-month, $2.7 million contract for 220,000 square feet at 465 N. Almstead St. The military contractor doubled its space in the two-story building owned by Broadreach Capital, which recently upgraded its common areas.