LOS ANGELES-Madison International Realty's recent $295 million 49% ownership interest acquisition of One California Plaza demonstrates the company's continued interest in the Downtown Los Angeles market, Madison International Realty president Ronald M. Dickerman tells GlobeSt.com in this update to a recent story.

“We are big believers in Downtown Los Angeles,” says Dickerman. Madison International Realty is the second-largest stakeholder in Thomas Properties Group Inc., who formerly owned City National Plaza downtown. “That was a successful investment for us, and we were looking for additional ways to increase our exposure,” he adds.

Prior to the joint venture, Beacon Capital Partners LLC owned 100% of the building after buying out MGP Office Trust's minority holding. Beacon Capital Partners was then over-allocated on the asset and looked to Madison International as a friendly joint venture partner. “The chance to partner with Beacon Capital is one that we had sought,” says Dickerman. “We thought this was a fabulous opportunity to invest in a meaningful way with a best-in-class sponsor in a building that is somewhat of a franchise in Downtown Los Angeles.”

But, Madison International also knows the downtown market is strong for office investment. This particular asset is close to the district courthouse, creating a somewhat built-in pool of tenants, who as Dickerman puts it, would be “very committed to the building.” The property is nearly fully leased and has a low 20% lease roll through 2020.

More over, the majority of new development activity downtown is focused on retail and multifamily space, not office, including the recently reported Megatoys' warehouses multifamily development. “There has been really no new office construction there in almost 20 years,” says Dickerman. “Rents in West Los Angeles and Santa Monica have really started to run, and I think there is a really interesting relationship between rental growth in West Los Angeles and what has been going on downtown. We're bullish over the intermediate to long term in Downtown los Angeles.”

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Kelsi Maree Borland

Kelsi Maree Borland is a freelance journalist and magazine writer based in Los Angeles, California. For more than 5 years, she has extensively reported on the commercial real estate industry, covering major deals across all commercial asset classes, investment strategy and capital markets trends, market commentary, economic trends and new technologies disrupting and revolutionizing the industry. Her work appears daily on GlobeSt.com and regularly in Real Estate Forum Magazine. As a magazine writer, she covers lifestyle and travel trends. Her work has appeared in Angeleno, Los Angeles Magazine, Travel and Leisure and more.

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