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6/07/16
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Hudson Pacific Properties has been busy of late. The West Coast-based real estate firm led by Victor Coleman has sold a 195.7k sf office property in the Bay Area for $53.5 mil, and has reached an agreement to purchase a 500.5k sf office building in West Los Angeles for $311 mil, or about $620/sf.
The acquisition is for a Class A tower located at 11601 Wilshire Blvd, west of the 405 Fwy at Barry Ave in Brentwood. The building, which has served as Hudson Pacific’s headquarters since 2010, is currently 83% leased. It is being sold by Blackstone.
The purchase of this property provides the company with an opportunity to create value through enhanced operations, the lease-up of vacant space, and re-leasing of space at market rents above those currently in place. The acquisition is expected to close no later than July 31, 2016.
On the disposition side, Hudson Pacific sold One Bay Plaza, a 195.7k sf building located at 1350 Bayshore Hwy in Burlingame, for $53.4 mil (before credits, prorations and closing costs). Hudson Pacific was repped by Eastdil Secured in the sale.
In addition, the company is also expecting to be fully repaid on its $28.5 mil Broadway Trade Center note participation prior to or shortly following the 11601 Wilshire Boulevard acquisition. Net proceeds from the sale of One Bay Plaza and repayment of the Broadway Trade Center Note will be used toward the acquisition of 11601 Wilshire Boulevard.
Coleman, the firm’s Chairman and CEO, noted, “The completion later this year of the previously announced sale of our 12655 Jefferson property in Playa Vista for $80 mil will likewise provide additional disposition proceeds to repay interim financing used for the purchase of 11601 Wilshire Boulevard. Indeed, we expect to identify the 11601 Wilshire Boulevard acquisition as the replacement property for 12655 Jefferson pursuant to a 1031 reverse exchange.”
In addition to approximately $80 mil of net proceeds from the sale of One Bay Plaza and the repayment of the Broadway Trade Center Note, the company expects to fund the remaining approximately $231 mil required to close the 11601 Wilshire Boulevard acquisition with a combination of funds from its revolving credit facility, project financing, and/or private placement proceeds.
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