Douglas Emmett Buys Century City Building
Santa Monica investment manager Douglas Emmett Realty Advisors on Wednesday added another trophy property to its portfolio of major local office and apartment buildings: Century City’s 20-story 1901 Avenue of the Stars.
Douglas Emmett, which owns and operates commercial real estate on behalf of various institutional investors, bought the building for about $150 million from a venture of San Jose-based Divco West Properties and New York’s Westbrook Partners, sources familiar with the transaction said.
That team had purchased the 1901 tower and its sister high-rise at 1900 Avenue of the Stars from struggling Shuwa Investments in 1999 for about $200 million.
Divco West Vice President John Moe confirmed that the sale closed Wednesday but declined to provide details. Douglas Emmett didn’t respond to requests for comment.
Douglas Emmett was a primary contender for the two towers when Divco bought them. But the property is worth more today, despite the recent slowdown in Westside tenant demand.
That’s primarily due to the higher revenue the 1968-vintage tower generates after extensive capital improvements and improved occupancy Divco achieved before listing the property for sale with West L.A.-based real estate investment banker Secured Capital Corp.
Although commercial real estate trading activity has declined with the economy, “there’s still strength in the market for well-located Class A properties,” said investment specialist Bob Safai of Madison Partners. “And Century City is still one of the best addresses around.”
Yet the owner of a nearby high-rise opted to pull it off the market after top bids were below expectations.
Vancouver, Canada-based Bentall Corp., which had put the 21-story 1888 Century Park East tower up for sale about the same time Divco and Westbrook began marketing the 1901 building, will instead hold the property indefinitely, the company’s top U.S. executive, Gary Carpenter, confirmed Wednesday.
Marketing specialist Justin Eckert of brokerage services firm CB Richard Ellis in Century City said occupancy rates in the district have increased since midyear. Including space tenants are trying to sublease, overall vacancies in Century City are at 6.6%, compared with 8% at midyear.
Asking rents for available Century City space have continued to rise throughout the year and now average about $40 a square foot annually. But Eckert predicted that rents will flatten or even decline a bit in the months ahead.
Douglas Emmett’s Los Angeles properties include 1801 Century Park East, 10990 Wilshire Blvd. and the former Sherman Oaks Galleria. Among its Santa Monica buildings are 100 Wilshire Blvd. and 401 Wilshire Blvd.
