Younan Sells Last L.A. Asset for $58M

Younan had owned the class A steel frame office building since February 2004, when it acquired it for $34 million in a joint venture partnership with Philadelphia-based institutional investment management firm Urdang Capital Management. Younan says that the sale generated an 86% annual IRR and a total return of more than 240% on invested capital in the two and one half years the property was held.

Despite the good results that Younan has achieved in Southern California, chairman and CEO Zaya Younan has told GlobeSt.com that the company believes now is a good time to exit the market for greater opportunities elsewhere. "The significant compression of the cap rates in Southern California has created negative leverage on most transactions. We have enough experience in this market to know this is an alarming trend and a great indicator of an over-valued market," Younan comments.

Younan is now focusing on what the company chairman calls "high growth areas in Chicago, Dallas and Houston." Besides being the last of its Los Angeles area holdings, the Pacific Pointe building was the last California asset for Younan, which owns a portfolio valued at about $1.5 billion.

The Pacific Pointe building, built in 1988, is a 12-story tower occupied by major tenants that include Bowman and Brooke LLP, CBeyond Communications, Inc., IBM, Northrop Grumman Corp., Kintetsu International Express and Hyundai. In June, Younan Properties completed the $50.5 million sale of its next-to-last L.A. property, the 173,727-sf class A Sepulveda Center office building at 3415 Sepulveda Blvd. in Los Angeles.