Hines Sells Wilshire Office Tower for $225M

Douglas Emmett, Inc., a California based REIT, in partnership with Qatar Investment Authority (QIA) announced the acquisition of a Class A office building in Los Angeles for $225 million, or $616 per square foot. The 19-story building was sold by a fund managed by Hines; Hines acquired the property from Deutsche Asset & Wealth Management for the same amount in 2007 on behalf of its U.S. Office Value Added Fund II, L.P. Douglas Emmett will manage the joint venture and expects to retain a 20% to 30% equity interest, with the remainder held by institutional partners. Eastdil Secured handled the transaction.

Designed by Tracy Price Associates, 12100 Wilshire Boulevard was completed in 1985 and is located at the intersection of Wilshire Boulevard and Bundy Drive in the Brentwood submarket of West Los Angeles. The building features ocean views starting from the second floor, outdoor balconies on the top two floors and an above-market parking ratio. Including known move-outs, the property will be 77% leased at the time of closing, with major tenants including Baum Hedlund Aristei & Goldman, Akana (formerly SOA Software Inc.) and Regus.

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JV Buys $1.34B Los Angeles Office Portfolio

Douglas Emmett, Inc., the California-based REIT, announced that in a joint venture with Qatar Investment Authority (QIA) it had acquired a 1,725,000 square foot office portfolio in Westwood for $1.34 billion, or approximately $777 per square foot. The JV secured a a non-recourse $580 million interest-only loan with a seven-year term in connection with the acquisition. The interest rate is floating at Libor plus 1.40%, which has been fixed at 2.37% annually for five years through an interest rate swap.

Douglas Emmett indicated that it plans to retain 20-30% of the equity in the joint venture, with the remaining interests being held by institutional partners. With this purchase, Douglas Emmett controls 74% of the Westwood Wilshire office corridor, where it already owned One Westwood, 10960 Wilshire, The Tower, 10880 Wilshire, Westwood Place and Westwood Center.

For QIA, this joint venture represents another step in its plans to significantly expand its US investment portfolio, and follows other large investments in real estate, such as in New York City last year. In 2015, QIA announced plans to invest $35 billion in North America over five years.

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Qatar and Brookfield Buying Canary Wharf

Brookfield Property Partners announced this week that its has entered into a 50/50 joint venture with Qatar Investment Authority to acquire the outstanding ordinary shares of Songbird Estates, which owns approximately 69% of Canary Wharf Group. If the offer is approved by Songbird Estates shareholders, the JV will make an offer to acquire the 31% of the outstanding shares of London's Canary Wharf not already owned by Songbird to take full ownership of the East London skyscraper cluster Canary Wharf, one of the world’s leading financial districts. Songbird Estates said it expects its biggest shareholders will accept an offer from Qatar Investment Authority and Brookfield Property Partners it had previously urged them to reject. Songbird said it still thought the $4 billion (3 billion pounds) price undervalued the estate, but with no rival bid forthcoming and holders of 86% of the shares backing the deal, it said its minority investors should accept.

Ric Clark, CEO of Brookfield Property Group, stated, "The placement of $1.8 billion of equity is a great endorsement of our global premier asset strategy. We are on the path to building the world's leading portfolio of best-in-class property assets. This capital will enable us to launch BPY to the next phase."

Qatar Investment Authority said in a statement, "We are making this strategic investment in Brookfield Property Partners as part of our investment plan to diversify globally in the real estate sector. This transaction takes our existing institutional relationship with Brookfield Asset Management to the next level, establishing a global platform for us to ‎continue our collaboration with Brookfield."

The main tower in Canary Wharf — a major office development begun in the 1980s by Toronto-based Olympia & York — is home to some of the world's biggest banks. Companies including Barclays Plc, HSBC Holdings Plc, Citigroup Inc., Morgan Stanley and JPMorgan Chase & Co. have offices in the district, best known for the 50-story tower at One Canada Square, the U.K.’s tallest building until the Shard was completed in 2010.

For more news and information visit Blumberg Capital Partners.