Third-Time Charm: Broker’s $111M Office Sale

BRENTWOOD, CA-Dougas Emmett Inc. of nearby Santa Monica has acquired the 310,000-square-foot Wilshire Bundy Plaza office building for $111 million in a bankruptcy proceeding in a deal that marks the third time that Los Angeles-based brokerage Madison Partners has sold the property. The 14-story office tower, which is situated on 1.02 acres of land at 12121 Wilshire Blvd. in the West Los Angeles submarket of Brentwood and was 85% occupied at closing, was sold in a bankruptcy involving Namco Capital Group of Los Angeles.

Madison Partners’ Bob Safai says that the $358-per-square-foot deal represents the largest year-to-date sale in the West Los Angeles office submarket. He cites “difficult market conditions, a complicated property bankruptcy proceeding and a difficult loan-assumption process” involved in the transaction. “Because of the complex bankruptcy and loan assumption process, the sale process lasted an entire year,” Safai says.

Madison Partners will retain the leasing assignment for Wilshire Bundy Plaza, which Emmett acquired via a closed-end fund, according to the Santa Monica-based REIT. In conjunction with this transaction, the fund assumed an amortizing term loan with a current principal balance of approximately $56.4 million and a 5.67% interest rate. The loan matures on April 1, 2016.

Emmett, in its announcement of the acquisition, notes that it now owns and operates 14 properties aggregating 1.7 million rentable square feet within the Brentwood submarket. “This transaction increases the company’s market share within the Brentwood submarket to approximately 51% from 41%,” the REIT says.

Douglas Emmett’s total commercial portfolio now consists of 57 office properties totaling approximately 14.6 million rentable square feet. The Ccompany also owns 2,868apartment units in Los Angeles and Honolulu.