UCLA Pays $700M for Pair of Los Angeles Office Assets
The Regents of the University of California has acquired One Westside and Westside Two, two office assets totaling some 687,000 square feet in Los Angeles, for $700 million. The seller was a partnership between Hudson Pacific Properties and Macerich, which held 75 percent and 25 percent interest in the venture, respectively. UCLA intends to convert the two buildings into a medical and engineering research park.
The former owners completed a redevelopment project on the property in 2022—which was originally built in 1985 as a shopping center—converting it to office space, according to CommercialEdge data. Wells Fargo Bank provided a $414.6 million construction loan for this endeavor in 2019.
READ ALSO: Office Trends in 2024—How Much Will the Sector Change?
Also in 2019, Google signed a 14-year lease for the entirety of One Westside, taking 584,000 square feet. The tech giant had agreed to pay $36.6 million in annualized base rent, according to SEC filings. However, the company never moved into the space and will be released from the agreement once the sale is finalized, Bisnow reports. Going forward, the LEED Gold-certified property will serve as UCLA’s research center, housing the California Institute for Immunology and Immunotherapy and the Center for Quantum Science and Engineering.
Located at 10800 W. Pico Blvd., the campus is roughly 12 miles west of downtown Los Angeles, some 10 miles from the Los Angeles International Airport and 6 miles from the Santa Monica Pier.
The former Westside Pavilion shopping mall is not the only UCLA acquisition in downtown Los Angeles. In mid-2023, the university paid $40 million to purchase the 351,189-square-foot Trust Building from Lionstone Investments.
High debt volume
Hudson Pacific Chairman & CEO Victor Coleman stated in prepared remarks that the sale proceeds will allow the company to address outstanding debt and have no maturities until the end of 2025. According to a recent CommercialEdge market bulletin, office debt volume in Los Angeles totaled $60 billion as of October, of which more than 17 percent is due by the end of 2024, and nearly 36 percent is maturing in 2026.
The price per square foot for the UCLA deal amounted to nearly $1,020, marking one of the priciest sales in the past few years, far surpassing the $267 average recorded in the metro as of November, CommercialEdge shows. In the first 11 months of 2023, investment volume in Los Angeles totaled $1.96 billion, the metro being among the most attractive markets for investors nationwide.
The post UCLA Pays $700M for Pair of Los Angeles Office Assets appeared first on Commercial Property Executive.
