A foreign investor has acquired the DreamWorks Campus in Glendale for $290 million. A joint venture between Chinese investor Hana Asset Management and OceanWest purchased the property from Griffin Capital Co., which acquired the 460,000-square-foot office campus in 2015 for $215 million. Asian capital is highly attracted to large, single-tenant office assets in West Coast gateway markets, and the brokerage team, led by Kevin Shannon, West Coast Capital markets president at NKF, assumed that the property would go to a foreign buyer early on in the sale process.

“This offering was never broadly launched,” Shannon tells GlobeSt.com. “NKF has had tremendous success in 2017 selling several large single tenant deals, which never had a formal broad marketing program. These include the Urban Union and Dexter Station sales in Seattle and Centre 425 in Bellevue, which were class-A office assets leased to Amazon and Facebook totaling $868 million. We have another major single tenant office deal under contract currently on the West Coast off market as well. Over 80% of the potential buyers on these deals were foreign buyers primarily from Asia and Europe. These buyers love looking at these types of assets off market. We knew Hana would be an aggressive buyer for DreamWorks given our extensive recent experience with similar profile deals. We always expected the buyer would be foreign for DreamWorks.”

Single-tenant properties, like this, are rare in Los Angeles, and this asset was particularly desirable, considering the strong, long-term tenancy. “The buyer was fortunate to source a major single tenant asset in the Los Angeles market,” says Shanon. “Foreign capital loves investing in single tenant long-term leased class-A office assets in gateway coastal markets like San Francisco, Seattle and Los Angeles. In Los Angeles, the most active office builders are REITS like Hudson and Kilroy who rarely sale. There has been only one single tenant office sale in Los Angeles over $100 million in the last five years excluding the DreamWorks transactions. It was a scarce single tenant opportunity in the nation's most desirable target market for foreign capital. Many foreign buyers strongly prefer less management intensive single tenant assets.”