Maguire Sells 530,000 SF at Lantana Campus

The Lantana Campus is home to the Recording Academy, the musicians' organization that hands out the Grammy Awards, which maintains its headquarters at the campus. Naras Properties is an affiliate of the Recording Academy, which signed a 15-year lease for the 66,899-square-foot headquarters building in 2008. Terms of the lease were not disclosed, but sources at the time pegged it at $91 million, making it one of the highest rental rates ever signed on the Westside of L.A. at about $7.55 per sf per month over the 15-year term.

The sales of the properties continue a Maguire debt-reducing strategy that has included the sales of other office properties in Los Angeles and Orange counties as well as allowing some of its properties to go into default. As of Sept. 30, Maguire had $4.4 billion of total consolidated debt, including just under $ billion of debt associated with properties in default, according to a public filing by the REIT.

Maguire bought the Lantana Campus from Hines US Office Development Fund in late 2004 for nearly $137 million, financing the purchase in part with a $98 million, five-year fixed rate loan provided by Greenwich Capital Financial Products Inc.

The Lantana Media Campus mortgage and construction loans were scheduled to mature in January and June 2010 respectively, according to recent Maguire filings. The REIT said it was marketing this property for sale in hopes of disposing of it before the maturity dates of the loans.

Maguire was represented by Carl Muhlstein and Andrew McDonald of Cushman & Wakefield in the sale, with the Recording Academy represented by its executive managing director, Arlene Sommer, and corporate managing director Mark Robinson of Studley's West Los Angeles office.

Lionstone Group founding partner Tom Bacon said in a statement that the acquisition of the Lantana Campus demonstrates tha the company is "confident in the recovery of the West Los Angeles-Santa Monica sub-market." Lionstone bought the Lantana Campus as part of Lionstone Urban Investments Two, a $400 million fund that acquires real estate assets in high-amenity urban areas. The addition of Lantana increases Lionstone's West Los Angeles position to more than one million square feet of creative and adaptive reuse properties, and represents its sixth property along Santa Monica's media and tech corridor.

Lee & AssociatesWest Los Angeles in Santa Monica, which assisted in the transaction, is Lionstone's West Los Angeles consultant and will assume brokerage responsibilities for the property. Jim Jacobsen, LeeWest LA co-president and long-time Lionstone strategic partner, will oversee management of the Lantana campus, including brokerage, renovations and completion of LEED certification efforts.