The buyers are Canyon-Johnson Urban Fund LP of Beverly Hills and development partner New Pacific Realty Corp. of Los Angeles. K. Robert "Bobby" Turner, who is co-managing partner of the Canyon-Johnson Fund along with Ken Lombard, tells GlobeSt.com that the sale is expected to close next week and that the buyers have committed $50 million for the redevelopment of the site.

Exactly what the new owners will develop remains to be seen, Turner says, but it will likely be a combination of office, housing and retail. The 12-acre Transamerica complex includes the signature Transamerica Tower, a 32-story structure of 500,000 sf that is about 55% occupied, mainly by Transamerica, along with two other office buildings, the 400,000-sf Broadway Building and 300,000-sf Hill Street Building.

Turner tells GlobeSt.com that the buyers' ultimate plans for the site will depend in part on what happens with the 400,000-sf Broadway Building, which is under consideration by the City of Los Angeles as the interim LAPD headquarters during construction of the new Parker Center. The Broadway Building is about 21% occupied while the Hill Street building is approximately 86% occupied on a long-term lease by the State Bar of California.

The three buildings are connected via underground and above-ground walkways and share a host of features, including a 23,000-sf full service cafeteria, a 12,000-sf roof-top restaurant, a 500-seat theater located on the lobby level of the Hill Building, a 25,000-sf health club with racquetball and basketball courts and three parking structures with more than 3,500 spaces. The buyers acquired the property for well under replacement price, according to Turner, who estimates conservatively that the cost of building such a complex today would top $250 million.

The buyers see "great promise" of a return from the investment, says Turner, who notes the new development at the site will add momentum to the ongoing revitalization of the South Park area. He points out that besides the three office buildings, the complex includes six acres of vacant land that could potentially be entitled for 1,500 new residential units. In addition, the Transamerica Tower is "a wonderful candidate" for conversion to housing. But conversion to housing is "just one of the options," he says, adding that the new owners "will absolutely look at retail" as a possible component to their development.

The Canyon-Johnson Urban Fund is managed by Canyon-Johnson Realty Advisors LLC, a partnership between Canyon Capital Realty Advisors LLC of Beverly Hills and Magic Johnson's Johnson Development Corp., which was founded in 1993 and has since been involved in a number of high-profile projects, both here and elsewhere in the country. The fund is one of the nation's largest urban real estate funds with nearly $300 million of committed equity capital poised to facilitate more than $1 billion of development and revitalization in major US metropolitan markets. The fund's other developments in the Los Angeles area include an investment of $125 million in a project at Sunset and Vine in Hollywood to develop 300 residential units on top of 100,000 sf of retail space through its partnership with Bond Capital of Los Angeles.

The Canyon-Johnson partner in the Transamerica property, New Pacific Realty Corp., is a Los Angeles-based real estate investment and development company that focuses on value-added investments in office, residential, retail, industrial and hotel properties. The company is led by principals David P. Margulies, Arnold S. Rosenstein and Diana M. Laing, who were involved in more than $3 billion in real estate transactions before forming New Pacific.