Irvine Co. to Pay $350 Million for High-Rise in L.A.
Irvine Co. has reportedly agreed to buy Fox Plaza in Century City from billionaire Marvin Davis for a record-breaking $350 million, according to people familiar with the situation.
The deal would net Davis about $80 million only three years after he purchased the building. Meanwhile, Irvine Co., headed by Orange County developer Donald Bren, would expand its beachhead on Los Angeles’ Westside, where it owns an office complex on Olympic Boulevard and a luxury high-rise apartment building in Santa Monica.
Fox Plaza’s sale price values the 711,000-square-foot building at about $490 a square foot--a local record, according to real estate observers.
Executives at Davis Cos. and Irvine Co. declined to comment.
Bren’s Irvine Co. is apparently banking on Westside office rents--already among the highest in Southern California--to continue to escalate as top quality space remains in short supply and demand continues to grow, according to area real estate brokers.
“It’s absolutely a top-shelf, trophy building,” said Stephen L. Bay. co-manager of the Los Angeles brokerage operations of Insignia/ESG.
The 34-story tower--featured in the movie “Die Hard”--on the Avenue of the Stars boasts a prestigious lists of tenants, including Fox Entertainment Group Inc., Goldman Sachs Group Inc. and Donaldson Lufkin & Jenrette Inc. Earlier this year, Fox, which occupies nearly half of the tower, renewed its lease for 15 years in a deal valued at more than $250 million.
The closing is expected to take place in September, pending a review of the building by Insignia/ESG, which is advising Bren, people familiar with the deal said.
This isn’t the first time Davis, who made his money in the oil business, has sold Fox Plaza.
He developed the building in 1987 and soon after sold his interest to News Corp.’s Rupert Murdoch for a $50-million profit. Murdoch then sold it to the predecessor of Chicago real estate firm Jones Lang LaSalle, which sold it back to Davis.
The sale comes amid signs of a slowdown in national real estate markets.
Even though the Los Angeles area saw office vacancy rates fall in the second quarter, rent gains in the next 12 to 18 months should be tempered because of a drop-off in demand from new Internet and technology-related firms, according to a Cushman Realty Corp. report.
