Pacific Eagle to Buy Office Tower
A real estate investment operation affiliated with one of Hong Kong’s wealthiest families will acquire one of the tallest office towers in Beverly Hills today for $27 million, the president of the buyer company confirmed.
The K.S. Lo family-controlled company’s acquisition of the 12-story tower at 9701 Wilshire Blvd. continues a recent string of sales of high-profile office buildings on the fast-recovering Westside. The property reportedly fetched less than $19 million in recessionary times just three years ago, after selling for $30 million when local real estate markets were approaching cyclical peaks in 1986.
“We think it’s a good buy in a good location along Wilshire within the ‘Beverly Hills Triangle’ just three blocks from Rodeo Drive,” said David Hennefer, president of Pacific Eagle Holdings in San Ramon, Calif. “It’s a doggone good piece of land and building, and there’s such a demand for first-class office space in Beverly Hills, we think its value will always be high.”
Although the seller, an offshore investment group advised by New York’s Falcon Real Estate, clearly made a tidy profit on its October 1994 investment, Hennefer said Pacific Eagle sees opportunity as the market continues to improve.
The 1972-vintage curved-glass tower at Wilshire and Roxbury Drive is the first Los Angeles-area acquisition for Pacific Eagle, which is part of the worldwide business empire controlled primarily by Hong Kong’s K.S. Lo family. Pacific Eagle owns the Le Meridien Hotel in Boston and commercial real estate in New York and Northern California.
And the Lo family’s publicly traded holding company, Great Eagle Holdings Ltd., is embarking on a major international hotel venture--with members of the Saudi royal family--that includes the Fairmont and Princess chains.
Pacific Eagle was interested in the 9701 tower when it was up for sale three years ago and was one of the top bidders for Century City’s landmark Century Plaza Towers, which domestic pension funds advised by J.P. Morgan & Co. purchased this year for about $475 million.
Noting that Pacific is pursuing additional Los Angeles-area office and hotel investments, Hennefer said the 102,319-square-foot 9701 tower is a solid investment opportunity in part because the new owner will soon be able to offer a major tenant three contiguous levels of upper-floor office space and building-top signage in a marketplace with little available space and rising rental rates.
Vacancy rates within most high-quality office buildings in the heart of Beverly Hills have fallen to a minuscule 2% to 3% as the economy has recovered, said Tracy Rasmussen, a first vice president with brokerage CB Commercial Real Estate Group.
Consequently, asking annual lease rates have climbed to a range of $32 to $36 per square foot.
Rasmussen also noted that the 9701 tower will probably always be one of the ritzy city’s tallest commercial buildings because future Beverly Hills office developments are limited to three stories.
