LOS ANGELES—Rising Realty Partners hasrecapitalized the historic PacMutual Building withLionstone Investments as its new equity partner.Lionstone has replaced former equity partner Mount KellettCapital Management for an undisclosed price. RRP willremain the operating and managing partner of the asset.

“I think from Mount Kellett's perspective, it was time to taketheir chips off the table and move on. They had done what theywanted to do and gotten the return they wanted to get,”Christopher Rising, RRP president and COO, tellsGlobeSt.com. RRP purchased the asset in 2012 with Mount Kellettwhen it was only 50% leased. Through a $25 million renovationproject, they have brought the asset up to 90% occupancy andrecently achieved LEED-Platinum certification, becoming the oldestbuilding in Los Angeles to hold the esteemed green title. “When webought the project, there wasn't a whole lot of conservativecapital that was interested in doing this deal,” Rising adds.“Realty equity is priced based on risk, and we found a wonderfulpartner in Mount Kellett. They believed in our vision and believedwe could execute it.”

Lionstone Investments approached Mount Kellett about taking overthe company's stake in the asset. “We were looking for capital thatwas much more long term because we still believe there is a lot wecan do with this project,” says Rising. “We believe we can continueto improve it and make it a marquee asset in Downtown Los Angeles.”The price of the offer is not disclosed, but Rising assures that itwas a fair market rate. “Mount Kellett decided it was a good pricefor them, and we decided it was a good price for us to stay in thedeal. Mount Kellett and ourselves wouldn't have done it if wedidn't believe this was a very good, full-market price. Atthe same time, we have invested our own money again, so it was alsoa very fair price.”