West LA Office Tower Commands $311M
- Jul 11, 2016
Los Angeles—Hudson Pacific Properties Inc. has acquired the former Wells Fargo Center—a 500,475-square-foot, Class A office tower in Los Angeles—for $311 million, from funds managed by The Blackstone Group.
“Our team’s long history of occupancy and prior ownership of 11601 Wilshire Boulevard provided a competitive edge to understanding the value creation potential for this asset,” Victor Coleman, Hudson Pacific chairman & CEO, said in a prepared statement. “Our success in selling One Bay Plaza and securing the timely repayment of our Broadway Trade Center note adds to our already ample capital sources to fund this transaction.”
Located at 11601 Wilshire Blvd., the property has served as Hudson Pacific’s headquarters since 2007, and was 83 percent occupied at the time of the sale. The company plans to renovate the property and lease up the remaining space.
“[The building] is a landmark property at the gateway of one of Los Angeles’ premier Westside office corridors,” Coleman said. “We intend to further elevate this asset within the marketplace, spending capital wisely to facilitate lease-up and create value for our stockholders.”
Hudson Pacific funded the acquisition with approximately $80 million in net proceeds from a combination of the sale of One Bay Plaza and repayment of the Broadway Trade Center Note, and $150 million of funds from a private placement of 3.98 percent senior guaranteed notes due July 6, 2026, with the balance funded from a draw under its unsecured revolving credit facility. It also secured an additional $50 million from a private placement of 3.66 percent senior guaranteed notes due September 15, 2023.
Hudson Pacific has been busy with its California portfolio lately. In January, the company sold Bayhill Office Center, a 554,328-square-foot Class A office campus in San Bruno, Calif., to YouTube for $215 million; and last fall, it sold two buildings at Bay Park Plaza in Burlingame to private equity firm H&Q Asia Pacific for a reported $90 million.