Beaudry Center Sold Again--for $167 Million
The much criticized but fully leased Beaudry Center One office building on the fringe of downtown Los Angeles has been sold again, this time to private Stamford, Conn., investors for a healthy $166.8 million.
The triangular, 29-story edifice--winner of a 1983 “lemon” award by a local group of developers, realtors and architects as an “economic and architectural failure”--was sold by Sun-Cal Properties Inc., a subsidiary of a Dallas savings and loan, to Real-Vest Corp., which said it owns properties in downtown Pittsburgh, Atlanta, Wilmington, Del., and other cities.
The sales price ranks high among downtown Los Angeles real estate transactions and was considered especially generous because of Beaudry’s location, which is separated from the main financial district by the Harbor Freeway. But the building has the virtue of being fully leased for 21 years to Security Pacific National Bank.
‘Awfully High Price’
“Since it’s full, it’s probably worth it,” said Ray Lepone, a senior marketing consultant at Grubb & Ellis commercial brokers. “But it’s an awfully high price to pay for that side of the freeway.”
The sale includes the 29-story building, completed in 1983, and part of the since-constructed parking garage, which won its own lemon award for looking like a “sardine can.” The transaction does not include a partly completed second office building, Beaudry Center Two.
Sun-Cal, a unit of Dallas-based Sun Belt Savings & Loan, acquired the Beaudry project last August from the developer, C-D Investment Co. of Los Angeles. It was one of several C-D properties in Southern California bought by Sun-Cal when the developer got into financial trouble. Officials of Sun-Cal didn’t return phone calls Wednesday.
Two months later, the mostly empty Beaudry building was leased by Security Pacific, one of C-D’s creditors. Bank officials said their lease of the building was unrelated to their loan to troubled C-D and stemmed instead from their need for office space precipitated by the $320-million sale of Security Pacific’s headquarters in downtown Los Angeles. But the fact that Security Pacific was committed to the building for 21 years--subletting seven floors to AT&T; Information Systems and some smaller tenants--made the building attractive, according to buyer Ronald Thiessen. He said the lease calls for periodic rent increases.
“That ‘no vacancy’ sign is a great comfort,” said Thiessen, one of three principals in Real-Vest. “I’ve seen some buildings that have won architecture awards that haven’t been able to make it. This place is financially secure for 21 years.”
Consultant Lepone said the building was initially difficult to rent because of its location, an unusual floor plan and its huge, 40,000-square-foot floors. The typical office building floor is about 24,000 square feet, he said.
Thiessen, a vice president of the firm, said he and two other Connecticut men, Donald Gary and Lester Pokorne, have acquired the One Oliver Plaza and Frick buildings in downtown Pittsburgh, the Bank South and 34 Peachtree buildings in downtown Atlanta and other structures since starting their firm in 1980. Beaudry One is the biggest investment to date.
He wouldn’t identify other investors. He said Real-Vest assumed the original $110-million mortgage held by General Electric Credit Corp. and financed the rest with a second mortgage held by Western Savings & Loan of Dallas. He added that Real-Vest will probably refinance the original mortgage on more favorable terms.