LOS ANGELES-Three prominent office buildings have been sold by Hines Real Estate Investment Trust Inc. to GI TC One Wilshire LLC for a total price of $550 million.
The properties include One Wilshire, a 30-story, class-A office building located in downtown L.A. that contains 663,000 square feet of telecom, retail and office space. The building was acquired by Hines REIT in 2007. The property is 93% leased to such companies as Verizon Communications, CRS West, Quest Communications, CoreSite, Crowell Weedon and Musick Peeler.
The other two buildings are located in El Segundo and are familiar to any traveler heading to Los Angeles International Airport via the 105 Freeway. They are the Raytheon and DIRECTV buildings, a three-building office complex in the South Bay submarket.
The 11-story, class-A buildings contain a total of 550,579 square feet and were acquired by Hines REIT in 2008. They are fully leased to their namesake compaies on a long-term basis.
“We believe it is an appropriate time to exit our position in the One Wilshire and the Raytheon and DIRECTV buildings, and we are pleased to execute a single transaction for all the assets to a high-quality buyer,” said Sherri Schugart, president and CEO of Hines REIT, in a prepared statement.
Eastdil Secured represented the seller with respect to One Wilshire. CBRE represented GI TC One Wilshire LLC in the acquisition of all the buildings.
The deal, which was the largest office sale in downtown Los Angeles since 2007 and one of the largest ever in El Segundo, means core deals still get a great premium, says Kevin Shannon of CBRE, who lead the brokerage team that included Sean Sullivan, Todd Tydlaska and Ken White. “The growth prospects are superior to that you will find for conventional office space.”
One Wilshire is “one of the top three telecommunications centers in the world,” Shannon says. “If you're one of the three leading hubs in the world, it's a scarse commodity anyway. One of the big attractions of the deal was One Wilshire is the hub for the fiber route from Asia to North America,” Shannon says.
Hines REIT originally acquired its interest in One Wilshire in August 2007 for $287 million and purchased the Raytheon and DIRECTV buildings in March 2008 for $120 million. The net proceeds received by Hines REIT from this 2013 sale were slightly over $266 million after transaction costs.
Hines REIT currently owns interests in 43 commecial properties containing 19.9 million square feet of leasable space.
GlobeSt.com recently profiled Hines co-owner, president and CEO Jeffrey Hines, one of Real Estate Forum's Office Real Estate Icons for 2013.
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