Real Estate - APRIL 11, 2016

AXA, Pramerica acquire 49% stake in West Los Angeles office

by Andrea Waitrovich

AXA Investment Managers – Real Assets, on behalf of AXA Insurance Cos., has acquired a 49 percent stake in an office asset at 5900 Wilshire Blvd., Los Angeles, entering into a joint venture with Pramerica Real Estate Investors, which sold down part of its interest, and The Ratkovich Co., the property operator.

“This deal offers us access to a compelling core-plus investment opportunity in one of West Los Angeles’ fastest-growing submarkets, on behalf of our clients,” said Steve McCarthy, U.S. head of asset management and transactions, AXA IM – Real Assets, in a statement.

A sales price was not disclosed. Ratkovich Co. and Pramerica Real Estate Investors paid $102.5 million for the office in 2005. The previous owners completed a $34 million renovation of the building in 2008.

5900 Wilshire is a 31-story class A office tower, totaling approximately 425,000 square feet. The landmark property is located in Los Angeles’ Miracle Mile district and enjoys 360-degree views of the city.

The property is across the street from the Los Angeles County Museum of Art, the largest art museum in the western United States, which also occupies office space at 5900 Wilshire. Other tenants include international companies such as Sundance Institute.

The Ratkovich Co. will continue to serve as the property manager.

In 2015 the Los Angeles market was seeded second in Real Capital Analytics’ “Top 40 Markets of 2015,” totaling more than $27.6 billion in transaction volume, a 7 percent year-over-year increase. The market has held the second ranking, behind New York City, since 2009.

During the first quarter of 2016, 42 office properties were sold in the L.A. market, totaling more than $2.5 billion. 5900 Wilshire Blvd. is located in Los Angeles’ Hollywood/Santa Monica submarket, where more than half of the sales volume during the first quarter was located.  Approximately 13 offices in the Hollywood/Santa Monica market were sold, totaling more than $1.6 billion.

Several offices on Wilshire Blvd. have traded hands so far this year. Jamison Services paid $20 million for 2601 Wilshire Blvd. The seller was Cohen Asset Management.

Lincoln Property Co. and Rockwood Capital are the new owners of 911 Wilshire Blvd., paying $128.5 million to Brickman Associates. And Douglas Emmett Realty and Qatar Investment Authority acquired a four-property portfolio that included 10960, 10940 and 10880 Wilshire Blvd. and 1100 Glendon Ave. from The Blackstone Group for approximately $1.34 billion.

And in the second quarter, the office located at 4525 Wilshire Blvd. was purchased by Ocean West for $22.7 million.

Pramerica Real Estate Investors is the real estate business of PGIM Inc., the global investment management businesses of Prudential Financial, Inc. (NYSE: PRU), and operates as Prudential Real Estate Investors in the Americas, Korea and Japan.

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