Los Angeles office building sells at 52% less than 2018 price

A LOS Angeles office building located near Century City and Beverly Hills sold for about 52 per cent less than its price five years ago.

Harbor Associates and F&F Capital Group bought the five-storey property at 1640 Sepulveda Blvd for about US$44.7 million, according to a statement on Tuesday (Dec 26). The building last sold in 2018 for US$92.5 million.

It is the latest sale of an LA office building in a market that’s been pressured by the rise of remote work and financing challenges brought about by soaring interest rates. Recently, the Aon Center in downtown LA sold for US$147.8 million, about 45 per cent less than its previous purchase price in 2014.

The building at 1640 Sepulveda Blvd was constructed in 1987 and has had more than US$11 million in renovations, including upgrades to tenant spaces as well as a redesigned lobby. It was 80 per cent occupied at the time of the deal’s closing, according to the statement.

“After several years of kicking the can down the road, we are now beginning to see distress hit the market,” said Joon Choi, Harbor Principal. “There are still compelling opportunities to find the hidden gems at a deep discount to replacement.”

The deal is the second real estate acquisition for the joint venture in the past two months. Harbor and F&F acquired an industrial portfolio in Carlsbad, California, for about US$21 million in November. BLOOMBERG