Silverstein Snaps Up Iconic Asset At Major Discount In First West Coast Foray
It will be New York-based Silverstein's first foray into the West Coast, the LA Times reported. The company is a well-known name in New York real estate circles, having developed One World Trade Center.
For the past two months, rumors have been circulating that Silverstein was in the process of acquiring the 72-story, 1.4M SF skyscraper at 633 West Fifth St. downtown for a discounted price. OUE put the building on the market with Eastdil Secured last year for $700M.
But the coronavirus pandemic and Gov. Gavin Newsom's subsequent stay-at-home order have negatively impacted downtown LA's central business district and may have driven the price down.
A Savills report released earlier this month found that office leasing activity in Los Angeles fell 52% from the first quarter of this year to the second quarter.
"Second quarter leasing activity totaled just 1.9M SF across Los Angeles, marking the lowest quarter of leasing activity since the Great Recession," the Savills report said.
In a statement to the LA Times, an OUE spokesperson said the U.S. property market did not look favorable in the long term and that the sale would help the company streamline its assets.
“Due to the measures implemented by state governments in the U.S. in response to the COVID-19 pandemic, the tenants in the property have reduced, or temporarily closed down, their operations, and the rental income from the property has been correspondingly affected,” OUE said in a statement to the Times.
For Silverstein Properties, which is owned by renowned developer Larry Silverstein, this acquisition marks the company's first West Coast asset. Silverstein Head of Acquisition Jeff Grasso told the Times that with this acquisition, the company will continue to look for other trophy office assets to grow its West Coast portfolio.
Aside from being one of downtown Los Angeles' major skyscrapers, the U.S. Bank Tower is well-known for its Skyspace LA attraction. Skyspace on the 69th and 70th floors features an indoor and outdoor interactive visitor experience with 360-degree views of downtown and a protruding 45-foot, all-glass slide that wraps around the exterior of the building.