Marvin Davis Buys Back Fox Plaza for $253 Million; Area Growth Is Cited
Billionaire financier Marvin Davis, one of the original developers of Fox Plaza in Century City, has repurchased the tony 34-story building for $253 million, one of the highest prices paid for an office building in Southern California in recent years.
“We have a lot of confidence in the Los Angeles economy, the Westside in particular,” said Michael Colleran, an executive vice president for Davis Cos. “Everybody in the area seems to be growing in size and increasing employment.”
Marvin Davis’ development firm sold its 50% stake in the building in 1988, one year after it was built, to its major tenant and investment partner, 20th Century Fox Film Corp. Fox soon resold the property to two investment funds managed by LaSalle Advisors of Chicago for a reported $320 million. LaSalle put it back on the market earlier this year to take advantage of the sharply rebounding real estate market.
“Investors are getting really bullish on Southern California,” said Robert Briscoe, vice president of LaSalle Partners Investment Banking Group. “Prices are going nowhere but up.”
The 710,767-square-foot building at 2121 Avenue of the Stars garnered worldwide attention as the setting for the 1987 movie “Die Hard,” starring Bruce Willis. It is 98% occupied, housing not only Fox, but several entertainment and corporate law firms, the office of former President Reagan, as well as Marvin Davis’ own office.
Davis reinvested in the building because development in the area is limited and demand for top-quality space is increasing at a fast clip, Colleran said. Moreover, the $253-million price tag is still below what it would cost to replace the posh project.
Brokers say the sale is further proof that the commercial real estate recovery is picking up steam. Century City was one of several Westside office markets that began showing a marked improvement early last year. The vacancy rate in the glossy sub-market has dwindled to 8.7%, according to CB Commercial Real Estate Group. Shrinking vacancy has also started to put pressure on rents. The average asking price edged up 4% in the last quarter, to $2.12 per square foot per month.
Colleran said Davis is actively pursuing other high-profile real estate purchases throughout the Southland. The deal maker has owned or operated in the past such projects as the Water Garden in Santa Monica, Pebble Beach golf course on the Monterey Peninsula and Aspen Ski Resort in Colorado.
