With 2013 all but over, the Los Angeles real estate market looks set to end the year with a huge headliner as one of the largest office asset acquisitions that the city has seen this year is set to take place. The media has been buzzing over the past week with news that Hines Real Estate Investment Trust Inc. has agreed to purchase the Howard Hughes Center from current owner Blackstone Group LP for a fee of $506 million.
The Howard Hughes Center offers tenants 1.318,682 square feet of office space divided into five Class A office buildings located at 6080, 6060, 6701, 6100 and 6601 Center Drive. Located near the Howard Hughes Promenade, one of the most high-profile shopping spots in the area, the office complex was developed over 15 years between 1987 and 2002. The campus has a vacancy rate of 12 percent, with a tenant roster totaling 93 companies.
Houston-based Hines REIT Inc. has filed paperwork for the completion of this blockbuster deal with the Securities and Exchange Commission, which, according to Bloomberg.com, revealed that the deal will be closed by the 15th of January. The Howard Hughes Center last traded hands when current seller Blackstone acquired it back in 2006, part of a joint acquisition of Trizec Properties Inc., along with Brookfield Office Properties Inc.
The Los Angeles office market is finally showing signs of stabilization after a number of years during which vacancy rates have ballooned to a value of almost 17 percent. Data provided by Marcus and Millichap Real Estate Investment Services shows that, based on their forecast for the final quarter of 2013, the end of the year will mark a plateau for greater downtown’s vacancy rate.
Chart courtesy of Marcus & Millichap Real Estate Investment Services at marcusmillichap.com