William Morris gets a deal in a down market
William Morris Agency, the century-old talent firm that has represented generations of movie stars and other artists, has bucked a tough real estate market and sold its Beverly Hills headquarters complex for $143 million to a consortium led by South American investors.
The price amounted to $783 a foot, about twice the average price of an upscale Los Angeles office building. But the buyers, a partnership consisting of Cape Horn Group of Chile and Lincoln Property Co. in Dallas, aren’t complaining.
“We are extremely happy with the properties,” Eduardo Covarrubias, a co-founder of Cape Horn Group, said in a phone call from Chile. Owning them offers a sense of financial certainty in an uncertain era, he said.
“They give us ideal protection from inflation at a time when there is turmoil in the financial sectors,” Covarrubias said. “We’re putting our money into hard assets that are going to preserve their value.”
William Morris said Friday that it would stay at its current site as a tenant until 2010, when it expects to move into an environmentally friendly building under construction on nearby North Beverly Drive.
The three-building complex, dating to the early 1950s, holds down a prestigious corner near the intersection of Wilshire Boulevard and Rodeo Drive and hasn’t been on the market before. So it drew strong interest from investors even though financing for real estate deals has nearly dried up in recent months because of the global credit crunch, said David Binswanger, who heads Lincoln Property’s L.A. office.
One of the buildings fronts Rodeo Drive and is backed by the other two facing El Camino Drive.
With sales of properties that cost $50 million or more growing rare in the last six months, “there is no way to dispute that this [sale] is an anomaly today,” said Marc Renard of Cushman & Wakefield, one of the brokers who represented William Morris in the sale.
The talent agency has owned and occupied most of the 182,000-plus square feet of space in the buildings for decades, Chairman Jim Wiatt said, but it’s time to go.
The company’s expansion and planned relocation “was the catalyst behind our decision to sell these incredible assets,” Wiatt said.
William Morris will move about 400 employees to the new six-story headquarters in 2010. The building being developed for them by George Comfort & Sons Inc. will include a private movie theater, seating as many as 200 people, and restaurants on the ground floor.
After the agency leaves its historic home, the new owners plan to rent the offices. “The space is immaculate,” Binswanger said. “William Morris is very image-conscious.”
The acquisition is the first in Southern California for Cape Horn, which also owns about 1 million square feet in Chicago and Miami.
“We’ve been looking for over a year to get into the L.A. area,” Covarrubias said. “We focus on purchasing prime properties and hope to buy more in Southern California.”