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The ongoing effort to sell Union Bank Plaza in Downtown LA could finally be winding down, but not without some more bumps.
The KBS-created real estate vehicle KBS REIT II that owns the 40-story, 701K SF property has been trying to sell it to an affiliate of Joel Schreiber's Waterbridge Capital for a discount since the summer. It seems that additional extensions and a $15M credit have now become part of the deal.
The deal was supposed to close in October. The most recent extension of the deadline to close was Jan. 5, according to a document KBS submitted to the Securities and Exchange Commission on Thursday. It was the sixth such extension that KBS granted for the transaction to close. A representative for KBS confirmed to Bisnow that the sale is still pending.
In the recent filing, the $155M price tag — a significant discount from the $208M KBS paid in 2010 when it purchased the building — was discussed as including a $15M credit, though the filing doesn't say what the credit is for.
"With rising interest rates, prospective buyers were challenged to obtain favorable financing, which along with the lower demand for office space, impacted the projected cash flows of the property and the purchase price prospective buyers were willing to pay for the property," a November KBS filing with the SEC said.
During the first nine months of 2022, KBS said that its "estimated net realizable value after closing costs and fees" for the property had decreased by $42.3M. As of Sept. 30, Union Bank Plaza was 57% occupied.
Representatives for Waterbridge Capital couldn't be reached.
LA's office buildings, like most others in major cities across the country, haven't bounced back from the pandemic. They remain occupied at a rate well below pre-pandemic levels, and the average size of leases has continued to shrink.
UPDATE, JAN. 6, 3:06 P.M. PT: This story has been updated to reflect that the sale is still pending.
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