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WEST LOS ANGELES-A buyer from the Los Angeles South Bay has acquired the 82,258-sf Wellesley Plaza office building at 12304 Santa Monica Blvd. for $28.9 million and stands to realize substantial upside by rolling rents to market in the building, where tenants are paying up to 50% below market, according to Coldwell Banker Commercial Westmac. T.C. Macker and Craig Newlands of Los Angeles-based Coldwell Banker Commercial Westmac represented both buyer AZ Wellesley Plaza LLC and Westside-based seller Santa Monica-Wellesley.

Newlands tells GlobeSt.com that the new owner plans significant capital improvements, to be designed by Gensler, as part of the plan to capture the upside in a West Los Angeles market where demand is high and vacancy low. Macker notes that, “The West Los Angeles office market continues to be one of the tightest and best performing submarkets in the nation,” with a current vacancy rate of 4% and year-over-year rent growth of averaging about 13% since 2005.

The 12304 Santa Monica Blvd. building was completed in 1981 and was 98% occupied at the time of the sale, with a substantial portion of the building’s space to be rolling over soon. Asking rates under the new ownership are expected to be about $3.75 per sf per month, full service gross.

Newlands tells GlobeSt.com that the building, which was on the market without a specific asking price, generated about 20 offers from a variety of types of investors. About half were locally based private investors, he says, while the remainder included some semi-institutional and larger syndicated fund type buyers.

The building represented “a rare opportunity to acquire a building of this stature on a major thoroughfare in West Los Angeles,” according to Newlands. He points out that although there are quite a few office buildings under 100,000 sf on the Westside, they trade relatively infrequently. One of the few in this size range to trade lately was the 92,000-sf 10780 Santa Monica Blvd. building in Westwood, which sold for $33 million.

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