April 4, 2023 9:00 AM
Newmark announces it has completed two separate Downtown Los Angeles office property sales, totaling approximately $157 million. The first property, Union Bank Plaza, a 675,945-square-foot mixed use office tower, sold for $111 million. The second property, 801 South Grand, a 215,097-square-foot office tower, sold for approximately $46 million.
Newmark Co-Head, U.S. Capital Markets Kevin Shannon, Executive Managing Directors Ken White and Rob Hannan and Senior Managing Directors Laura Stumm and Michael Moll, and Associate Director Alex Beaton represented the sellers in both transactions – KBS on the sale of Union Bank Plaza to buyer Waterbridge and CIM on the sale of 801 South Grand to buyer Elat Properties.
“Both of these Downtown Los Angeles office sales got done ahead of the new Mansion Tax, which was an important driver. These transactions clearly demonstrate the tremendous basis advantage available for contrarian investors, which will allow them to be extremely competitive to attract new tenants,” said Shannon.
Standing 40-stories tall, Union Bank Plaza is a trophy office tower situated on a 3.6-acre oversized site that spans one city block, the largest single tower site in downtown Los Angeles. Located at 445 South Figueroa Street, the asset was 62% leased at the time of sale to a tenant roster anchored by Union Bank, which occupies 30% of the property. The property also features 27,157 square feet of retail.
Union Bank Plaza benefitted from an extensive capital improvement plan that was completed in 2021, adding lush landscape and hardscape to the site, modern lobby and corridor renovations, a new conference facility with indoor-outdoor features and building system upgrades. Located adjacent to the 110 Freeway and within blocks of the 7th street metro station, the property’s location offers tenants convenient access to numerous retail locations and public transportation.
801 South Grand was 74% leased at the time of sale to a diverse tenant roster with a weighted average lease term of 5.4 years. Built in 1986 and renovated in 2014, the property is situated on 1.35 acres and features 11 office stories, 594 parking stalls and over 8,000 square feet of retail space. The property offers a mix of high-end creative and traditional corporate space that caters to a wide depth of tenancy. Proximate to the 110 Freeway and blocks from the 7th Street Metro station, 801 South Grand sits in a transit-oriented location with superior access to South Park’s top amenities. The property is directly adjacent to Whole Foods Market and within proximity to L.A. Live, Crypto.com Arena and numerous retailers and restaurants. The property benefits from South Park’s strong residential growth that includes more than 28,000 units in the pipeline.
Though down from pre-pandemic levels, Los Angeles was the second leading market for volume of office investment sales, trailing only Manhattan, New York. According to Newmark’s 4Q22 Capital Markets Report, sales declined year-over-year across property sectors, while hospitality was the only sector to increase quarter-over-quarter. There were small seasonal increases in December 2022 deal closings, except for multifamily.
Newmark Group, Inc. (Nasdaq: NMRK), together with its subsidiaries (“Newmark”), is a world leader in commercial real estate, seamlessly powering every phase of the property life cycle. Newmark’s comprehensive suite of services and products is uniquely tailored to each client, from owners to occupiers, investors to founders, and startups to blue-chip companies. Combining the platform’s global reach with market intelligence in both established and emerging property markets, Newmark provides superior service to clients across the industry spectrum. Newmark generated revenues of approximately $2.7 billion for the year ending December 31, 2022. Newmark’s company-owned offices, together with its business partners, operate from approximately 180 offices with nearly 6,700 professionals around the world. To learn more, visit nmrk.com or follow @newmark.
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