Why Ratkovich Sold Interest in the Bloc

The Ratkovich Co. has sold its total share in the Bloc, a 1.8-million-square-foot mixed-use complex in Downtown Los Angeles, to its equity partner in the project, National Real Estate Advisors. Ratkovich developed the massive $250 million project, which included a Sheraton Grand Hotel, a 33-story office tower, a sprawling retail plaza, which included a flagship Macy’s, and a pedestrian walkway connection to the subway station. The terms of the deal were not disclosed.

The Ratkovich Co. and National purchased the property together in 2013, and redeveloped the project, which ran behind schedule due to construction challenges. The center became a pillar of the resurgence in Downtown Los Angeles. Now that the project is completed, Ratkovich has decided to turn the long-term strategy over to National. “The Bloc has turned out to be a fine long term investment and National is a long-term owner,” Wayne Ratkovich, president and CEO of the Ratkovich Co., tells GlobeSt.com. “We simply chose to sell our interest to our partner now rather than wait for greater benefits later.”

It is unclear if the developer’s original plan was to sell its interest in the property; however, with the delay in construction times and the Ratkovich Co.’s other ongoing projects, namely San Pedro Public Market and the Alhambra, the company seemingly wanted to redirect its focus. “There was no predetermined business plan to sell our interest at any specific time,” says Ratkovich. “When it became apparent that it would require more time to reach the maximum point of value, we chose to sell now.” The company plans to reinvest the proceeds into “new” projects, according to Ratkovich, but couldn’t make any specific announcements.

The Ratkovich Co. was an earlier believer in Downtown Los Angeles, and with other projects in the market, it continues to be an advocate of the resurgence. Despite selling its interest in this property, the company plans to remain an active player in the market. “I think it says that DTLA is urbanizing or more accurately re-urbanizing, just as it functioned as the center of Southern California prior to World War II.  At The Bloc you can directly access mass transit, you can work, shop, stay, eat and enjoy entertainment,” Ratkovich explains. “I believe it is a great place to office and we plan on staying here and enjoying it.”

National will take over the property management of the Bloc.