Westside Building Fetches Premium Price
The owners of Santa Monica’s Arboretum Gateway, one of the city’s newest office buildings, on Thursday announced the sale of the six-story structure to an affiliate of the investment firm Lazard Freres.
Company officials declined to reveal a purchase price, but people familiar with the deal say it was about $80 million.
The buyer, Commonwealth Atlantic Properties Inc. of Washington, paid about $400 a square foot--one of the largest amounts ever for a major Los Angeles area office building.
The 201,000-square-foot building at the southwest corner of Cloverfield Boulevard and Colorado Avenue was sold by Three Coast Limited Partnership and joint-venture partner Apollo Pacifica.
The building, located in a cluster of low-rise offices complexes in eastern Santa Monica, was completed in September 1999 and is fully leased to Universal Music Group. It is the last structure to be built on the Arboretum Gateway property, which includes a supermarket and 350 apartments.
The building, which features an exterior of red sandstone and green glass, is one of many high-end office complexes built in eastern Santa Monica in recent years.
Several buildings near the Arboretum Gateway also have sold or are in the process of being sold for record-high amounts.
Across the street, the owners of Water Garden II are in negotiations to sell that 600,000-square-foot office complex for more than $240 million to an investment group advised by an affiliate of J.P. Morgan Chase & Co.
The building--completed last year by a group that includes J.H. Snyder Co., TransAction Cos. and an investment fund managed by Colony Capital--cost about $150 million to develop.
At the same intersection, MGM Plaza was purchased last year by New York-based Tishman Speyer Properties. Tishman paid Los Angeles developer Robert Maguire an estimated $360 million for the 1.15-million-square-foot office complex.
Santa Monica and other Westside office markets have seen vacancy rates climb and rents soften in recent months as once fast-growing dot-com tenants slow down or go out of business. An estimated 1 million square feet of space near the Arboretum Gateway is currently available for sublease.
