Japanese Owner to Sell Sanwa Plaza in Downtown L.A. for $215 Million

The Japanese owner of Sanwa Bank Plaza--a landmark skyscraper in downtown Los Angeles--on Thursday said it had agreed to sell the 52-story tower to Houston developer Hines for $215 million.

Mitsui Fudosan Co. of Tokyo said the sale would result in a $60-million loss as it joins the rank of Japanese investors that have sold off their U.S. real estate properties at a steep discount. Japan’s largest real estate firm said it was selling the nearly 1-million-square-foot, fully leased building to whittle down its debt and boost its finances, according to Bloomberg News.

Local real estate observers say the Sanwa deal marks a recent high sales price for office buildings in downtown Los Angeles, which has been struggling to recover from a deep recession. The building--one of the largest and most opulent built during the real estate boom of the late 1980s--occupies an entire block at the intersection of Figueroa Street and Wilshire Boulevard.

“That’s a high-water mark,” said James G. Shaw, a managing director at Cohen Financial, a real estate investment firm. “Sanwa is clearly recognized as [one of] the premier office buildings in downtown Los Angeles.”

Hines, which developed and has managed the 9-year-old building for Mitsui, said it plans to complete the purchase by the end of August, according to James Buie, who runs the company’s West Coast operations.

Mitsui is also interested in selling another of its downtown holdings--the 42-story AT&T; Center--it acquired in 1979, according to real estate brokers.

Hines, a privately held company, owns a worldwide real estate portfolio valued at nearly $5 billion.