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Union Bank Plaza has sold for the second time in as many years, this time trading for $80M, a significant discount to the property's prepandemic value and 23% less than when it last sold.
Southwest Carpenters Pension Trust purchased the building from Waterbridge Capital, which bought it for $104M in March 2023.
“This was a win-win transaction for the buyer and seller,” Newmark co-Head of U.S. Capital Markets Kevin Shannon said in a release.
Shannon and a team at Newmark represented the seller in the deal, which closed Tuesday.
“The buyer acquired an institutionally renovated office tower at approximately $100 per square foot, factoring in the value of the substantial adjacent development parcel that provides future upside potential,” Shannon said. “This is a massive discount to replacement cost and peak pricing of approximately $500 per square foot.”
Shannon also said the seller, W/B Union Plaza Holdings LLC, an affiliate of Waterbridge Capital, received “a substantial return” stemming from a lease termination payout from Union Bank after the company relocated to U.S. Bank Tower following a merger with that bank. The size of the payout wasn't disclosed.
Waterbridge bought the property from an entity created by KBS Realty Advisors. That transaction also involved Waterbridge assuming about $6M in capital obligations to tenants at the time.
The 2023 sale marked one of the first big Downtown transactions to happen after the pandemic and stood as a marker of how the office market had adjusted to new price levels. KBS bought the tower for $208M from Hines in 2010.
The 40-story property at 445 S. Figueroa St. in Downtown Los Angeles consists of a roughly 675K SF office tower and about 27K SF of street-level retail.
Newmark also represented Washington Capital Management, which was acting on behalf of Southwest Carpenters Pension Trust. The pension trust plans to move into part of the building and stabilize the remaining space.
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