Douglas Emmett, QIA Grab LA Ocean-View Office Gem
The joint venture paid $140 million to acquire 233 Wilshire from The Blackstone Group.
By Barbra Murray, Contributing Editor
233 Wilshire Blvd., courtesy of Equity Office Properties
Los Angeles—Douglas Emmett Inc. knows how to pick ‘em. The REIT and joint venture partner Qatar Investment Authority have just acquired 233 Wilshire Blvd., a premier office property on the west side of Los Angeles. The partners shelled out $139.5 million for the 129,000-square-foot building in Santa Monica, taking it off the hands of Blackstone Group, which continues to purge the holdings of its Equity Office Properties Trust portfolio.
It’s all about location. The building on 233 Wilshire Blvd., also known as Searise Office Tower, is positioned right at the gateway to the popular Third Street Promenade and just blocks from the beach. Built in 1976 and most recently renovated in 2009, the nine-story building is 94 percent leased and has maintained an average occupancy level of 93.1 percent over the last five years. Leading the tenant roster is Luther Burbank, which occupies approximately 11,300 square feet. And reflecting the property’s location in Silicon Beach, high-end media content provider Tunnel Inc. and prescription medication coupon website GoodRx Inc. each lease nearly 10,000 square feet.
In conjunction with the acquisition of 233 Wilshire, Douglas Emmett arranged to sell part of its interest in the asset to another sovereign wealth fund investor, leaving the REIT with a 20 percent stake in the property.
233 Wilshire marks Douglas Emmett’s third West Los Angeles acquisition this year. (The company’s target markets are Los Angeles and Honolulu.) Things have panned out just as the REIT had anticipated at the beginning of 2016. “Looking forward, we expect to see significant property sales in our markets in 2016 and remain hopeful that we can continue to make acquisitions that meet our target criteria,” Kevin Crummy, Douglas Emmett CIO, said during the company’s fourth quarter 2015 earnings conference call on February 10.
Douglas Emmett partnered with QIA on its two earlier transactions this year, including the $1.3 billion purchase of a 1.7 million-square-foot office portfolio in Westwood. The partners also snapped up the 365,000-square-foot office property at 12100 Wilshire Blvd. in Brentwood for $225 million.
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