Blackstone Sells Pair of Santa Monica Office Bldgs. to Douglas Emmett, Qatar Financial investment Authority JV for Top Dollar

PE Giant Sells 1299 Ocean Ave. and 429 Santa Monica Blvd. for $352.8 Million

Blackstone Group today offered a pair of Santa Monica office buildings amounting to about 292,667 square feet to a joint venture of Los Angeles-based Douglas Emmett, Inc. and the Qatar Investment Authority, commanding a premium list price of roughly $352.8 million. At about $1,205 per square foot, the workplace offer ranks as one of the most expensive in Southern California to close this year.

Blackstone has owned the buildings because its 2007 acquisition of Equity Office Characteristic Trust, which lots of analysts consider the top of the previous cycle in industrial residential or commercial property. Eastdil Protected brokered the transaction.

The buyers moneyed a portion of the purchase price through a $142 million protected, non-recourse, interest-only loan that develops in July 2019 and bears interest at Libor plus 1.55%. Douglas Emmett devoted 20% of the equity capital and handles the joint venture with QIA.

The traded office complex are 1299 Ocean Ave., an 11-story, 205,713-square-foot office complex, and 429 Santa Monica Blvd., a seven-story office complex located one block from Santa Monica’s 3rd Street Boardwalk and 3 blocks from the city line.

In spite of the sky-high cost, Douglas Emmett highlighted exactly what it called the “considerable lease-up chance” associated with the buildings, with 1299 Ocean at 79% rented and 429 Santa Monica at 70% leased, representing tenants that have actually validated they plan to vacate.

The offer likewise increases Douglas Emmett’s financial investment concentration in the downtown Santa Monica workplace market. Last year, the Douglas Emmett/QIA joint endeavor acquired 233 Wilshire Boulevard, a 129,000-square-foot office home for $139.5 million, and 12100 Wilshire Boulevard. With its most current purchase, Douglas Emmett said it increased its ownership of the Santa Monica Class An office market from 55% to 71%.

Douglas Emmett’s overall office portfolio now consists of 69 office residential or commercial properties amounting to approximately 18 million square feet. The firm likewise owns 10 apartment communities in Los Angeles and Honolulu making up 3,320 units, with another 850 systems under development.

The Quatar Financial investment Authority partnered with Douglas Emmett as part of its strategies to substantially broaden its financial investment in United States property. Other major current financial investments consist of the Manhattan West project it obtained in New York City in 2015, and a 9.9% interest in Empire State Real estate Rely on 2016. QIA has set an objective of getting $35 billion of North American realty over the next five years.

To find out more, please refer to CoStar COMPS # 3889796.

Leave a Reply

Your email address will not be published. Required fields are marked *