West Los Angeles Office Property Added to Aslan Portfolio
- Aug 12, 2008
Taking advantage of a location surrounded by freeways leading to downtown Los Angeles, Beverly Hills, Santa Monica and the Los Angeles International Airport in the popular West Los Angeles area, Transwestern Investment Co. has picked up Corporate Pointe in Culver City for an undisclosed price. It did so on behalf of Aslan Realty Partners IV L.L.C., a fully-discretionary institutional equity fund. Corporate Pointe consists of two multi-tenant office towers totaling 442,000 square feet in the West Los Angeles submarket. The property is currently more than 93 percent occupied. In-place rents are 24 percent below market, according to Transwestern information. Culver City’s Class A rental asking rates–for space that is available on the market at the end of the quarter–per square foot, are $3.68 on average, according to the “Los Angeles Office Market Trends” second quarter newsletter published by Grubb & Ellis Co. The West Los Angeles office market’s rate of increase in asking rates seems to have finally slowed down by inching back 2 cents for Class A space and 3 cents for Class B space, according to the Grubb & Ellis report. The market also experienced an increase in the vacancy rate as many tenants have cut their space needs in order to deal with the new price reality in West Los Angeles. The vacancy rate closed the quarter at 8.6 percent, up 20 basis points from the previous quarter. However, the area’s desirability has not diminished as many long-term deals are still being negotiated, according to the report. Transwestern’s Aslan funds represent a series of three domestic, value-added real estate investment vehicles initiated in 1999. Aslan III has been the flagship of Transwestern’s investment activity and totals $800 million in capital commitments from 50 institutional partners and many high net worth investors. Aslan III targeted domestic real estate assets that are undervalued or demonstrate strong prospects for value creation, with a focus on office, industrial, and retail properties. According to company information, Aslan investments are pursued nationwide through one-off acquisitions–typically with a cost of $25 to $100 million–as well as larger portfolio or entity transactions. The Aslan III fund has already invested in a geographically diversified portfolio of 36 office and four retail properties totaling 10.3 million square feet, representing a gross investment of $1.8 billion. Aslan III is expected to be fully invested over the next three years. Transwestern Commercial Services will manage the property and Jones Lang LaSalle Inc. will handle leasing responsibilities. Transwestern Investment is a private equity real estate investment firm that pursues domestic, value-added investment strategies through a series of institutional equity fund vehicles. Since its inception in 1996, the firm has made more than 450 office, industrial, retail, multifamily, and mezzanine loan investments nationwide representing a gross investment of $10.3 billion. The current equity portfolio includes 57 office and 10 retail properties totaling 19 million square feet, as well as 10 multi-family assets with 3,600 units.