LOS ANGELES-Newport Beach, CA-based KBS Real Estate Investment Trust II has acquired Union Bank Plaza, a landmark 627,334-square-foot office tower and retail complex in downtown Los Angeles. The acquisition price was $208 million, or $331.56 per square foot.  

The transaction increases the commercial real estate acquired by KBS-affiliated companies in 2010 to 4.4 million square feet. In addition to Los Angeles KBS has acquired signature office properties this year in Chicago, Dallas, St. Louis, San Diego, Portland, OR, and Herndon, VA, near Washington, D.C.

The 40-story tower, located between the 110 Freeway and Figueroa Street, has proven to be one of downtown L.A.’s most sought-after office properties since its completion, according to a prepared statement. Current occupancy stands at more than 96%.

KBS arranged financing of $119.3 million for five years, interest only, $105 million of which was funded at close at a fixed rate of 3.445%. Union Bank Plaza consists of a 607,517-square-foot office tower, a two-level, 19,817-square-foot retail plaza, and a 914-space, four-level parking structure.

Designed by the Southern California architecture firm A.C. Martin the property is named for its anchor tenant, Union Bank NA, which has had a presence in the building since its completion, as GlobeSt.com previously reported. The Bank currently occupies 55% of the rentable square feet. Union Bank NA is the primary subsidiary of UnionBanCal, the second largest commercial bank holding company headquartered in California with $84 billion in assets as of June 30, 2010. In November 2008, the Bank signed a lease extension for 345,000 square feet here in a deal that now former owner, Houston-based Hines’ said was the largest office lease in Downtown L.A. since 1989. Financial terms of that 10-year least weren’t disclosed, but asking rates for class A space in Downtown L.A. at the time of signing was averaging about $3.24 per sf per month.

“As one of downtown L.A,’s few truly iconic office towers, Union Bank Plaza serves as an ideal addition to the KBS REIT II portfolio,” says Bill Milligan, Western Region president for KBS Realty Advisors. “We expect the building’s class A-quality, prime address and high profile to contribute to continued tenant retention over the long term.”

Located at 445 South Figueroa St., between 4^th and 5^th streets, Union Bank Plaza has been completely renovated and updated. The property is serviced by 16 passenger elevators arranged in three banks, as well as an extensive outdoor plaza with reflecting pools, tree-shaded seating areas and a 1,250-square-foot pavilion available for meetings and conferences. A two-story retail center provides al fresco dining, restaurants and convenience services. Union Bank Plaza occupies an entire city block.

“Union Bank Plaza is perfectly positioned to benefit from the ongoing renaissance of downtown L.A., resulting from a $15-billion infusion of public/private investment responsible for the creation of such mixed-use complexes as L.A. Live, the Grand and various urban residential developments,” says Christopher Aust, KBS senior vice president and director of acquisitions for the Southwest Region.

Michael Zietsman and David Doup