Los Angeles commercial property landlord Evoq Properties Inc. has agreed to be sold for $357.4 million to a group of investors led by Atlas Capital Group of New York.
Evoq owns several downtown Los Angeles properties including vacant land ripe for residential development and Alameda Square, a vast historic industrial complex near Alameda Street and Olympic Boulevard that is gradually being converted to offices for tenants in creative fields.
Evoq stockholders are to receive $12.96 a share in the sale, expected to close in October. The transaction has been approved by the Evoq board of directors and its majority stockholder, Mmpi Acquisition, a venture formed in 2011 by Mount Kellett Capital Management and Global Asset Capital.
Evoq was created from the ashes of real estate company Meruelo Maddux Properties Inc., which went public in early 2007 and filed for Chapter 11 bankruptcy protection in 2009. Meruelo Maddux expanded rapidly through property acquisitions during the real estate boom of the mid-2000s but found itself burning through cash and still falling behind on debt payments after the economic downturn.
Founders Richard Meruelo and John Maddux were ousted, and the new managers changed the company name to Evoq in 2012. They set out to financially right the company by selling nonessential properties and focusing on 32-acre Alameda Square, one of the largest contiguous blocks of space in downtown Los Angeles.
Alameda Square was one of the most ambitious private developments of early 20th century Los Angeles, connecting the city's port with its downtown by rail. When the complex opened in the World War I era as Union Terminal Annex, it was the second-largest wholesale terminal in the world.
More than 100 wholesale and manufacturing firms conducted their entire business there, and such giants as B.F. Goodrich Rubber Co. and Owl Drug Co. had large-scale operations on-site. It had a bank, hotel, barbershop and restaurants. The vast majority of fruit and produce business for the region was conducted there.
Recent generations of Angelenos may recall the property as the former facility for food company S.E. Rykoff & Co. Two of the four large remaining buildings are occupied by clothing manufacturer American Apparel Inc.
Evoq's buyers are an entity established by affiliates of Atlas Capital Investors III, New York real estate investment firm Square Mile Capital Management and USAA Real Estate Co. of San Antonio.
Atlas and Square Mile specialize in investing in properties that need improvements and repositioning in their respective markets.
"The acquiring investors recognized the tremendous value of Evoq's portfolio and the opportunity to make a significant investment in downtown Los Angeles," said Martin Caverly, chief executive of Evoq. "We are confident that the new ownership group will play a positive role in downtown Los Angeles' continuing renaissance."
Buyers' representatives declined to comment on their plans for Evoq real estate.