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LOS ANGELES-The Houston-based Lionstone Group has acquired two office buildings totaling 150,000 sf near LAX airport with a $45.23 million on-book loan from GE Real Estate that closed in 23 days. Lance Wright, Dallas-based Southwest regional director for GE Real Estate, tells GlobeSt.com that the deal closed in 23 total days—not 23 business days.

“Closing in 23 days is quick in anybody’s book, under any conditions,” Wright observes, but such a quick closing is especially noteworthy in today’s difficult lending environment. The speed of close is an even greater accomplishment considering that the loan “had a lot of moving parts to it,” including a portion for construction and funds for tenant improvements and broker commissions.

Lionstone’s loan went toward the purchase of buildings at 5340 Alla Rd. and 12959 Coral Tree in Los Angeles, known as Playa Business Campus. The office buildings are close to Los Angeles International Airport and two blocks north of Playa Vista. Playa Vista is a 1,000-acre mixed-use office, retail and residential project at the former site of Howard Hughes’ aircraft plant, runway and hangars.

The Lionstone financing is a fixed-rate, interest-only loan for three years at an interest rate that is under 6%, with two one-year extension options on the loan. Wright says that Lionstone, which owns another property nearby, plans to add 20,000 sf of mezzanine office space to property.

Wright adds that the property also includes extra land for future development and offers potential for upside in raising rents when leases roll over, with part of the loan designated for tenant improvements and broker commissions on those rollovers. It is GE’s first loan to Lionstone, which acquired the properties from a local family. Scott Galloway, Cortney Cole and Cameron Cureton of the Houston office of Holliday, Fenoglio Fowler brokered the loan.

Tom Bacon, partner of the Lionstone Group, says that the Houston-based firm sees the buildings as “an attractive alternative to tenants migrating from the costly West Los Angeles suburbs.” A number of firms have already moved out of pricey West L.A. markets in recent months to rent for lower rates at buildings in the neighborhood of Lionstone’s new holdings, according to reports from brokerage firms.

Both of the new Lionstone buildings were built in 1973. The 5340 Alla Rd. building was approximately 89% leased at the time of the sale and the 12959 Coral Tree building was 100% leased. The Alla Road building is a two-story structure, and Coral Tree is one story.

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