LOS ANGELES—DivcoWest has acquired Glendale Plaza, a 24-story 531,000-square-foot office tower in Glendale. The terms of the deal were not disclosed, but industry sources unrelated to the transaction tell GlobeSt.com that the property traded hands for $179 million. The sales price is a clean $35 million below the property's price tag in 2006, when Prudential RE Investors purchased the asset for $214 million. DivcoWest was able to pick up the property as a discount.

Sean Sullivan of the CBRE Capital Markets Team did not comment on the price of the property, but tells GlobeSt.com, “We were at where we expected in price, but it is below what it traded for in 2006. In Glendale, people look at the market today as being way better than it was 10 years ago, because of the new residential and the retail amenities, but you can buy property at a discount. That is a lot of what is driving the interest in Glendale.” Sullivan represented the seller in the deal, along with Todd Tydlaska, and Michael Longo, while CBRE's Brad Zampa represented the buyer.

Sullivan says that the property traded so far below the previous sales price because of the shift in the capital markets since the last cycle. “There has been a change in the capital market,” he says. “Today, the capital markets want to be in core markets, like San Francisco or West L.A. or South Lake Union, and places like Glendale haven't caught up yet, but that could change. That is the bet that DivcoWest is making.”

The discounted pricing helped to draw major attention for the trophy asset, which is 95% leased. The sales team received roughly 12 offers. “There was a lot of interest in the deal,” says Sullivan. “There were about a dozen offers and it was a very competitive process. It was more competitive than we have seen in a few years outside out West L.A.”

In addition to the discounted pricing, investors were attracted to the growing Glendale market, which has had residential and retail development. “There is a lot of interest in Glendale right now. You can't really talk about Glendale without talking about the 3,500 units that have been built there in the three last year,” explains Sullivan. “That has really changed the vibe in the market and has really brought a lot of investor interest. It isn't a suburban market anymore. People are now looking at it as an infill semi-urban market now because of all of the residential density that has been added.”

Instant Insights /

Institutional Investor Buys Glendale Asset at Discount

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