Werner and Karasick's 555 California Owners LLC consolidated ownership of the three-building complex in 2004 for approximately $875 million, or about $175-million less than Hudson Waterfront Associates paid for the asset. Also involved in the JV was Toronto-based IPC US REIT, which provided $49 million of equity that helped the Werner-Karasick JV cobble ownership through multiple transactions. IPC this week received $85 million in proceeds from the deal for a 54% IRR over an 18-month hold.

Broker Doug Harmon of Eastdil Secured represented the Werner-Karasick JV in both the original acquisitions and the re-sale to Hudson Waterfront Associates. Harmon did not return a phone call seeking comment. Hudson Waterfront Associates acquired BofA center with 1031 exchange money from its sale of 77 acres along the Upper West Side of Manhatten between 59th to 72nd streets.

As reported by GlobeSt.com in October, IPC's investment entitled it to an annual return of 12% for a certain number of years and, after full repayment of capital, a 10.5% interest in the property. Because the JV did not hold the asset very long, part of the REIT's proceeds came in the form of a prepayment penalty. IPC is the only REIT in Canada that invests exclusively in US commercial real estate.