8th & Hope Sale Received 6 Offers

LOS ANGELES—Wood Partner's milestone sale of 8^th + Hope, a 22-story 290-unit multifamily complex in Downtown Los Angeles, garnered six total offers from institutional buyers, according to Curtis Palmer, EVP at CBRE, who represented Wood Partners in the transaction. In an earlier story, GlobeSt.com reported that Wood Partners sold the newly developed property for $200 million to Essex Property Trust, making it the highest comparable in the Downtown market.

“We had a lot of interest from all of the major institutional investors and REITs across the country,” Palmer tells GlobeSt.com. “We had five offers, and then two buyers that really distinguished themselves close to the $200 million number. At the end of the day, Essex was the most aggressive in terms of timing and price.” But, they weren't the first buyer to win the bid. Another, unnamed, institutional buyer was set to purchase the property by the end of last year, but ended up dropping out of the process. “That buyer actually came in at a higher price, but had allocation issues at the end of 2014,” adds Palmer. “They were awarded another deal in Dallas, and dropped out of the process, which was a little disappointing. We would have closed at the end of the year.”

Wood Partners, along with CBRE, brought the property to market in September of last year without a price. At the time of the sale, the property was 50% leased and 40% occupied, but still beat out the last highest comparable by 10% or $60 per square foot. “We were in line with expectations, and expectations were extremely high,” Palmer says about the final sales price, noting that they didn't loose any money when the first buyer dropped out; it only increased the timeframe. The next highest comp was the sale of the Watermarke, which Palmer explains was a stabilized asset that was 90% leased at the time of the sale. “When you do $60 higher on the next best comp, that is significant. The pricing was fantastic,” adds Palmer. “It was great for the seller, and in my mind, Essex got themselves the best located high-rise asset in Downtown Los Angeles.”

The offers from the other buyers ranged between $190 million and $200 million. Essex purchased the property in an all-cash transaction. “This was an excellent opportunity to acquire a high-end apartment community that is centrally located in the heart of downtown Los Angeles, in walking distance to numerous employment, retail and entertainment options,” Craig Zimmerman, EVP of acquisitions for Essex, tells GlobeSt.com about their interest in the property. “Nearly all the units have 10-foot ceilings with a glass curtain-wall which adds a combination of light and volume to the interiors that is unique to the downtown market. Downtown Los Angeles is undergoing a multi-year revival which we believe will further enhance the desirability of our location.” Essex Property Trust has a few other properties in the Downtown area, including the Bunker Hill Towers and Belmont Station.