The Los Angeles office market powered through 2020 despite one of the largest net migration losses recorded nationwide. According to data provided by CommercialEdge, office investment sales amounted to $3.2 billion and totaled some 9 million square feet, equal to a 30 percent drop from the $5 billion recorded in 2019. Foreign capital continued to pour into the metro, making Los Angeles one of the top markets for office transactions in 2020.
Investors focused on creative office space, highly amenitized assets, local landmarks, as well as fully leased buildings leased to prestigious tenants in the multimedia industry. The list below highlights the largest deals closed in Los Angeles in 2020, based on CommercialEdge data. The top five office deals amounted to $1.2 billion, equal to 38 percent of last year’s total sales volume.
|Rank||Property Name||Sq Ft||Buyer||Seller||Total Sale Price (MM)|
|1||U.S. Bank Tower||1,432,539||Silverstein Properties||Overseas Union Enterprise||$430|
|2||Mutual Benefit Life Plaza||452,764||Rockpoint Group||The Ratkovich Co.||$303.4|
|3||NineFifteen||385,588||Deka Immobilien||Lincoln Property Co.||$196|
|4||2041-2115 Colorado Ave.||92,000||Northwestern Mutual||Lincoln Property Co.||$166|
|5||Grand Avenue Courtyard||256,738||Starwood Capital Group||Brookfield Properties||$132.65|
READ ALSO: Top 10 Office Deals in California for 2020
5. Grand Avenue Courtyard, El Segundo
In early 2020, Starwood Capital Group and Artisan Realty Advisors teamed up in the acquisition of Grand Avenue Courtyard, a 256,738-square-foot office building in El Segundo, Calif. The property traded for $133 million, with Metropolitan Life Insurance Co. providing $84.8 million in acquisition financing. The asset previously changed hands for $67 million in 2017 as part of an $854.5 million national portfolio transaction, when Brookfield Properties purchased 60 properties from TA Realty.
The 12-story Grand Avenue Courtyard was completed in 1987 and includes 2,257 square feet of first-floor retail. It is home to a diverse roster of tenants such as Columbus Technologies and Services, the U.S. Social Security Administration, as well as legal practices including Donahue & Horrow and Moffett & Associates. Situated on 5 acres at 1960 E. Grand Ave., the property is a 2-mile drive from the LAX airport.
4. 2041-2115 Colorado Ave., Santa Monica
Last October, Northwestern Mutual paid a Northwood Investors and Lincoln Property Co. joint venture $166 million for 2041-2115 Colorado Ave., a premier creative office campus in Santa Monica, Calif. Previously an industrial complex dating back to 1946, the 92,000-square-foot asset traded for the first time since its 2019 conversion for office use.
Designed by RAC Design Build, the property encompasses four single- and two-story buildings fully occupied by Universal Music Group and Illumination Entertainment. The complex is across the street from Universal Music Group’s corporate headquarters, offering easy access to Interstate 10 and the Metro Expo Light Rail Line, which connects the property to downtown Santa Monica and Los Angeles, as well as Culver City, Calif.
3. NineFifteen, Los Angeles
Deka Immobilien’s $196 million acquisition of NineFifteen at 915 Wilshire Blvd. represents the German REIT’s first foray into the Los Angeles office market. A partnership of Lincoln Property Co. and Rockwood Capital sold the 385,588-square-foot, 22-story asset, which includes first-floor retail and an above-average parking ratio compared to neighboring office assets—a valuable post-pandemic feature. The asset previously traded for $128.5 million in 2016.
Completed in 1980 and renovated in 2017, the building is anchored by the U.S. Army Corps of Engineers and other GSA tenants. Other tenants include firms providing professional and financial services, entertainment, insurance and legal services.
2. Mutual Benefit Life Plaza, Los Angeles
In a $303.4 million deal, Rockpoint Group acquired Mutual Benefit Life Plaza, a 31-story skyscraper located at 5900 Wilshire Blvd. in Los Angeles’ Wilshire corridor. Rising 433 feet, the property is the tallest building in the city’s Miracle Mile district and the second tallest in the Wilshire area. The new owner funded the purchase with a $163.5 million financing package from Metropolitan Life Insurance Co. The seller, a partnership of PGIM Real Estate, The Ratkovich Co. and AXA Capital, purchased the asset in 2005 for $102.5 million.
The 452,764-square-foot building was developed between 1968 and 1971 and features 22,000 square feet of first- and second-floor retail. The property underwent a $34 million renovation in 2008 and has served as the official West Coast headquarters for SBE Entertainment since 2014.
1. U.S. Bank Tower, Los Angeles
In the largest single-building deal of 2020 in Los Angeles, Singapore-based Overseas Union Enterprise sold the iconic U.S. Bank Tower in downtown Los Angeles to Silverstein Properties for $430 million. Athene USA originated $274.9 million in acquisition financing for the deal. The former owner acquired the asset in 2013 for $367.5 million from MPG Office Trust.
Completed in 1990, the 75-story tower encapsulates 1.4 million square feet of office space, as well as an 82,524-square-foot retail component. The asset, previously known as Library Tower, then as First Interstate World Center, serves as regional headquarters for law firm Lewis Brisbois Bisgaard & Smith LLP.