Trizec Buys L.A. Skyscraper

Trizec Properties Inc., owner of more than 50 office buildings in the U.S., bought a 52-story tower in downtown Los Angeles for $356.7 million, increasing its holdings in the area by 30%.

The seller of the Figueroa at Wilshire tower was a joint venture of Houston-based Hines and Germany’s Deutsche Immobilien Fonds. The 1-million-square-foot building expands Trizec’s Los Angeles office portfolio to 4.5 million square feet, the Chicago-based company said Thursday. The tower is 87% occupied.

Office occupancy rates and rents have been rising in downtown Los Angeles. In the second quarter, the vacancy rate dropped to 15.9% from 16.6% in the previous three months, and rents rose 2.1% to $25.14 a square foot. Figueroa at Wilshire “has historically outperformed the market in terms of occupancy and rental rates,” said Brian Lipson, Trizec’s chief investment officer.

Two leases for about 29% of the space at 15-year-old Figueroa at Wilshire will expire around the end of the year, giving Trizec the opportunity to take advantage of “the improving office fundamentals in the downtown market,” Lipson said.

In downtown Los Angeles, Trizec also owns the Bank of America Plaza and Ernst & Young Plaza, which total 3.7 million square feet. In May, it sold the 383,000-square-foot Shoreline Square in Long Beach.

Trizec shares fell 34 cents to $21.21 on Thursday. The shares have gained 26% in the last year.