Pegasus

LOS ANGELES- Chicago-based Equity Residential has acquired the 322-unit Pegasus apartment tower at 612 S. Flower St. from Buchanan Street Partners and the Kor Group for $100 million in one of the largest ever Downtown L.A. multifamily deals. The all-cash sale was negotiated by a Cushman & Wakefield brokerage team led by Marc Renard, executive managing director of capital markets, who calls it another sign that institutional and publicly traded REITS are in search of core infill, coastal assets. Renard also led a Cushman & Wakefield team that negotiated the recent sale of the 150 S. Rodeo Dr. in Beverly Hills, as reported on GlobeSt.com. The buyer of 150 S. Rodeo was a locally based REIT, Douglas Emmett Inc., and in the GlobeSt.com report Renard told GlobeSt.com, “Investors are interested in the top coastal cities in the US, such as Los Angeles, Washington DC, New York City, San Francisco and Boston—and then, obviously, the top-tier buildings in those markets.”

Pegasus Rooftop Pool

Renard said that the Pegasus price, “reflects the competitive environment that exists for high-quality, multifamily properties in well-located, urban infill areas.” On a risk-adjusted basis, he said in an announcement regarding the deal, “The expected investment returns for core assets in high barrier-to-entry markets with aggressive, rental rate growth prospects, is very compelling.”

Kimberly Stevenson, a vice president at Orange County-based Buchanan Street Partners, said in the announcement that, “With the completion of the strategic upgrades and repositioning of Pegasus, we successfully executed on our value enhancement investment strategy.”

Pegasus is the 13-story former General Petroleum Headquarters Building, which the Kor Group bought in 2001 and converted into apartments in one of the first such conversions in Downtown Los Angeles, completing the project in 2003. Kor and Buchanan Street formed a partnership in 2008 and refinanced the project with a $78.3 million Freddie Mac loan through CBRE Capital Markets, according to a GlobeSt.com report at the time. In addition to its residential units, Pegasus includes the Daily Grill and Caf