BofA Plaza Sale Sets Record
A Chicago real estate investment trust has agreed to buy a downtown Los Angeles skyscraper for $440 million, which would be the highest price on a per-square-foot basis for a building in the central business district.
Trizec Properties Inc. said Tuesday that it would acquire the 55-story Bank of America Plaza, a 1.4-million-square-foot office building at 333 S. Hope St., from Beacon Capital Partners.
The price of $309 per square foot would surpass previous high marks including the $249 per square foot paid this month for 777 Tower, according to real estate data provider CoStar Group Inc.
“We’re very excited about downtown and Los Angeles as a core market for us,” said Michael Escalante, an executive vice president at Trizec. “We have been a big proponent of downtown and its upswing since we came here in 1997.”
By paying a record price for one of the tallest and biggest downtown L.A. office towers, Trizec is attempting to elevate its reputation as an owner of top-quality office properties, real estate observers said.
“This is a statement purchase,” said real estate broker Richard Plummer of Cushman & Wakefield, who with partner David Hasbrouck represented the seller in the deal, which is expected to close in September.
Trizec made its first downtown purchase in 1997 by acquiring a share of Ernst & Young Plaza, and it now owns the 41-story tower at 7th and Figueroa streets. The trust has ownership interests in 62 office properties in seven cities.
The Hope Street building was erected in 1974 by Los Angeles-based Security Pacific National Bank, which wanted a showcase headquarters to compete with Bank of America. A year earlier, BofA had built a lavish new Southern California headquarters in nearby Arco Plaza, Plummer said.
Security Pacific was acquired by Bank of America in 1992. Last year, BofA agreed to move its California headquarters to the Hope Street building, then known as BP Plaza. It will soon be 97% leased, Escalante said. Other tenants include petroleum company BP, Wells Fargo Bank and law firm Sheppard, Mullin, Richter & Hampton.
Beacon bought the building for $270 million in 2002, CoStar said. The $440-million sale price is “still significantly below” what it would cost to replace the building, Escalante said.
Before the BofA Plaza deal, Trizec’s best-known Los Angeles development was the outdoor shopping center Hollywood & Highland, which cost Trizec $540 million to build. The project was a financial disappointment, however, and Trizec sold the property to CIM Group in February for $201 million.
Trizec shares fell 4 cents to $17.30 on the New York Stock Exchange after the sale was announced.
