Texas Group to Purchase Landmark L.A. High-Rise

A Texas real estate investment group is set to purchase a landmark downtown Los Angeles high-rise in partnership with local landlord Hertz Investment Group, according to sources close to the negotiations.

An affiliate of Dallas-based Skyrise Properties is under contract to purchase Union Bank Plaza for about $89 million, knowledgeable sources confirm.

The Hertz group, perhaps the most active buyer of downtown office and merchandise mart properties, is expected to team with Skyrise to operate the 40-story tower, which overlooks the Harbor Freeway.

Affiliates of Equitable Life Insurance and Nippon Life Insurance are the longtime co-owners of the tower at 445 S. Figueroa St., which opened in 1967.

Citing confidentiality agreements, representatives of those companies as well as Hertz President Judah Hertz declined to comment on the pending transaction, as did real estate services company Cushman & Wakefield, which is said to be negotiating the sale on Nippon Life’s behalf. Representatives of Skyrise weren’t available for comment.

The $89-million price factors to just under $145 per square foot for the 620,000-square-foot tower, less than half of what prime Westside office properties have been fetching lately. That’s because softer demand for downtown offices has kept rents well below prevailing Westside rates.

Union Bank of California renewed its lease a year ago for more than half of the tower’s office space. The building is more than 95% leased and houses the popular Ciudad restaurant.

Equitable has been looking to sell its half-interests in the Union Bank tower, the 707 Wilshire tower and other downtown high-rises across the country.

Hertz Investment Group became one of downtown’s biggest landlords in recent years as it acquired several historical office buildings, jewelry marts and the California Mart apparel center.