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10/03/16
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Chase Plaza, a 105k sf, high-end office tower in Downtown Los Angeles, was acquired by the Lai family, an investor group that has operated in Southern California and Las Vegas since 1976, in a recent deal worth over $50 mil. The property was sold by a partnership between a New York-based investment group and a local real estate company.
The property, 888 West 6th Street, is located at the corner of 6th and Figueroa Street. The Class A office tower is currently occupied by 14 tenants.
“Most of our real estate investments are long-term holds,” said Macy Lai, Chief Executive Officer of the privately held buyer. Our main objective is to invest in prime locations, to manage the properties well and to enjoy the appreciation over a long-term period. 888 West 6th Street meets all our parameters. Further, it has a very reputable roster of tenants who will share with us in the tremendous growth of Downtown Los Angeles.”
CBRE’s Phillip Sample, Brad Chelf, Chris Caras and Michael Shustak represented both parties in the transaction.
"Values in Downtown LA are still well below what the West Side or metros like San Francisco or New York command," notes Chelf. "The value proposition of this part of town is extremely attractive with rental rates having plenty of room to run. Since 1999, Downtown has received $7.3 bil in residential, $1.2 bil in arts & entertainment, and $2.6 bil in civic and institutional investments."
Demand for downtown creative office has been booming as media and entertainment companies, including more recent additions like HauteLook, HyperLoop and Magnopus, are moving into the area. Asking lease rates in downtown Los Angles increased a substantial 9.3 percent in the first six months from a year ago as the submarket continued to gather traction and trophy landlords such as Brookfield pushed rents higher, according to the latest CBRE research.
“Quality office space in downtown is attracting employers who typically may have looked to Santa Monica or other West Side neighborhoods and in more recent history, Hollywood,” said Chelf. “These types of properties will continue to bring an increasingly diverse employer base to this area.”
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