A joint venture between Douglas Emmett and the Qatar Investment Authority announced the purchase of two downtown Santa Monica office buildings totaling 293,102 square feet, for a combined price of approximately $352.8 million. Douglas Emmett provided 20% of the equity capital and is the managing partner.
The largest of the two properties is Wilshire Palisades—a Class A, 11-story, 205,715-square-foot oceanfront office building located at 1299 Ocean Ave. The property was originally completed in 1980 and is now one of a few Class A Los Angeles office buildings to command significant rent premiums due to their beachfront views. The building features private balconies and a park plaza facing the coastline.
The second property is a seven-story office building located at 429 Santa Monica. It encompasses 87,927 square feet, including retail on floors one and seven. The building’s location is close to the Third Street Promenade mixed-use retail, dining and entertainment center and offers tenants good access to public transport, as well as both ocean and mountain views.
Accounting for known move-outs, Wilshire Palisades is 79% leased and 429 Santa Monica is 70% leased, making this deal a great lease-up opportunity.
This joint venture was one of the most active buyers on the market in 2016, when it invested over $1.5 billion in the acquisition of five Class A office buildings totaling roughly 2 million square feet: 10880 Wilshire, 10960 Wilshire, 12100 Wilshire, The Tower and the Westwood Center.
According to a Douglass Emmett statement, the purchase of this new portfolio brings the company’s ownership share of the Class A downtown Santa Monica office market up from 55% to 71%.
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