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LOS ANGELES-In a blockbuster deal valued at about $500 million, a partnership of locally based McCarthy Cook & Co. and New York’s Paine Webber Real Estate Fund I has acquired two trophy properties in Southern California and another in San Francisco.

The deal includes LA’s one-million-sf Wilshire Courtyard and the 570,000-sf South Coast Metro Center in Orange County. The third property is the 733,000-sf China Basin Landing complex in San Francisco.

The unusual transaction finds McCarthy Cook & Co. on both the selling and buying end of the deal. The seller is a partnership of McCarthy Cook and Blackstone Real Estate Advisors. The buyer is a partnership of McCarthy Cook and the Paine Webber real estate investment fund.

“Blackstone provided the opportunity to McCarthy Cook & Co. to be both a buyer and a seller,” Thomas E. McCarthy, co-president of McCarthy Cook, tells GlobeSt.com.

The sale, which sources say marks a 70% increase in the portfolio’s value in about three years, is yet another signal of the recent upswing in California’s real estate market.

When the Wilshire Courtyard property was acquired in 1997, it had a hefty debt of $360 million. The partners fought a bankruptcy case that was eventually settled in 1998. Over the next year and a half, approximately 800,000 sf was leased out, bringing the occupancy level up from 50% to nearly 100%.

“Wilshire Courtyard went from being a real ‘basket case’ to being fullyleased in a very short period of time,” Tom McCarthy tells GlobeSt.com.Under the new partnership, McCarthy Cook & Co. will continue its management, development and leasing roles for the Wilshire Courtyard as well as the other two projects, McCarthy adds.

McCarthy says that equity and debt financing for the $500-million deal was arranged by the LA office of Holliday Fenoglio Fowler.

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