L.A. Complex Fetches Rumored $300M
- Feb 04, 2011
Lincoln Property Co. and ASB Capital Management have sold two office buildings totaling 486,000 square feet in the Playa Vista master-planned development in West Los Angeles. While the price was not formally disclosed, various press outlets are approximating a $300 million value, making the deal one of the biggest Los Angeles County has seen in recent years.
The buildings—Phase I of Horizon at Playa Vista—were bought by the J.P. Morgan-managed investment fund Horizon PH I Office Holdings LLC. Eastdil Secured listed the two-building complex for sale in the fourth quarter of 2010.
“The opportunity to acquire Horizon Phase I sparked intense interest from institutional real estate investment firms across the country, which is a real testament to the quality of our office product and all that Playa Vista has to offer,” said David Binswanger, executive vice president of Lincoln Property Company in a statement.
Lincoln Properties and ASB also own two buildings in Phase II of the Horizon Campus. The pair will continue to build up Playa Vista as they own approximately 14 acres of additional land, space that is approved to house 750,000 square feet of commercial development.
The office market in West Los Angeles has been notably hard hit by the recession. Vacancy rates reached 16.8 percent at the end of the fourth quarter in 2010, up from 16.5 percent in the third quarter, according to a market report issued by Colliers International. Asking rental rates for direct space declined for the eleventh consecutive quarter to $3.24 per square foot.
“Despite continued stress in the commercial office sector, this transaction proves that there is demand for the right kind of office property, even in this market,” said David Quigley, managing director and chief financial officer, ASB Capital Management.
Phase I of Horizon was completed in 2009 with the majority of space contacted to Fox Interactive Media in a 12-year, approximately $350 million lease. The Horizon campus is located in the eastern portion of Playa Vista. It was the first ground-up office building construction in Los Angeles to achieve Gold LEED Core & Shell certification.