LaSalle Investment Management Lands Buyers for Two Properties in Playa Vista Neighborhood
The creative office building at 12901 W. Jefferson Blvd. in Los Angeles sold as part of LaSalle Investment Management's disposition plan. (CoStar)
By Katie Burke
CoStar News
June 3, 2024 | 12:47 P.M.
LaSalle Investment Management has secured buyers for a pair of office buildings in Los Angeles in the latest sign of a capital rebound for the sector following years of stifled investment caused by higher interest rates and uncertainty.
The global investment arm of JLL sold two creative office properties in the Playa Vista neighborhood in separate deals that netted the Chicago-based firm nearly $75 million. The dispositions included the roughly 48,400-square-foot building at 12901 W. Jefferson Blvd. — sold to a joint venture between Pacshore Partners and A2 Capital Management — as well as the nearly 131,950-square-foot Annex building at 5340 Alla Road that was acquired by Westside Neighborhood School.
The West Los Angeles private school operator paid $50.3 million for the Annex building, while the West Jefferson Boulevard property that's fully leased and serves as the global headquarters for media companies Deutsch LA and Steelhead sold for about $24 million.
The pair of transactions marked a significant price cut compared to LaSalle's initial investment. The firm paid about $140 million to acquire the two buildings in 2017, according to CoStar data and local property records, an investment that broke down to about $95 million for the Annex building and $45 million for the West Jefferson Boulevard property. LaSalle then secured a nearly $93.5 million loan in early 2020 to refinance the two properties.
Deep discounts aside, Newmark's Kevin Shannon, who helped broker the Playa Vista deals, said the sales spotlight building momentum among investors once again willing to bet on the national office market.
“The sale of both assets is a reflection of the increased liquidity we are seeing in the market, especially in a desirable submarket like Playa Vista where investors and users can obtain today a comparatively very attractive basis,” Shannon, Newmark's co-head of U.S. capital markets, said in a statement.
While Los Angeles' office market has stumbled in the face of record vacancy rates, declining rents and softening leasing activity, according to CoStar data, some pockets such as Playa Vista are in a stronger position to capture demand if and when it returns.
The neighborhood has attracted the bulk of the region's newest developments that have fared far better than older, less amenitized properties as tenants prioritize space in higher-quality buildings.
Rents in Playa Vista are also among the highest in the Los Angeles area, according to CoStar data, averaging about $55 per square foot despite the influx of new construction.
For the Record
Newmark Co-Head of U.S. Capital Markets Kevin Shannon brokered the sales on behalf of LaSalle Investment Management along with Ken White, Rob Hannan, Laura Stumm and Michael Moll. NAI Capital's David Kimball and Sam Devorris represented the Westside Neighborhood School in the deal for the Annex property.
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