After about a year of plunging values, the downtown Los Angeles office market has some good news, with UCLA announcing the purchase of a historically designated trust building.
The school will use the building at 433 South Spring Street in the Downtown Historic Core as a venue for satellite classes.
UCLA declined to disclose how much it paid for the 300,000-square-foot, 11-story Art Deco building. But the deal was priced at less than $40 million, less than half the building’s appraised value of about $88 million, according to people familiar with the matter. Los Angeles Times, was the first to report this story.
The seller, Rising Realty Partners, and its financial partner, Lionstone Investments, bought the building in 2016 for $80.4 million. Rising Realty also funded a $40 million renovation of the building, which included restoring original Art Deco features and bringing it up to modern earthquake safety standards. Celebrity chef José Andrés is expected to open a restaurant and bar on the trust’s rooftop later this year.
Rising Realty worked hard to find tenants and buyers for the trust building. In 2021, brokers will receive $1 million in bonuses if they can close a deal for a tenant that takes 100,000 square feet.
Mike Condon Jr. of Cushman & Wakefield, which represented the seller in the transaction, said that despite the discounted price, the UCLA acquisition showed that downtown Los Angeles’ days as an office hub were not over.
“In addition to the negative headlines that have been in downtown Los Angeles for several years now, the UCLA takeover of the trust appears to be one of the first green shoots of recovery,” Condon said.
– andrew ashe
