L.A. office building sells for $153.5 million — $115 million less than its sale price a


Last Updated: Dec. 30, 2023 at 5:43 a.m. ET

First Published: Dec. 29, 2023 at 12:56 p.m. ET

Newmark Group Inc. said Friday it arranged the sale of the 62-story Aon Center in downtown Los Angeles for $153.5 million in what the real-estate-development company described as the largest fourth-quarter deal for office space in the Western United States.

Carolwood LP, a Los Angeles-based private-equity firm founded in 2014, is the buyer of the building, which is located in the heart of the city’s financial district.

Carolwood…

Newmark Group Inc. said Friday it arranged the sale of the 62-story Aon Center in downtown Los Angeles for $153.5 million in what the real-estate-development company described as the largest fourth-quarter deal for office space in the Western United States.

Carolwood LP, a Los Angeles-based private-equity firm founded in 2014, is the buyer of the building, which is located in the heart of the city’s financial district.

Carolwood had been a backup buyer in Newmark’s sales process for another Los Angeles property, 801 Grand, which sold for $46 million earlier in the year.

The seller of the Aon Center, San Francisco-based real-estate-management company Shorenstein, paid $268.5 million for the building in 2014, according to a report by CoStar News. A Newmark spokesperson did not respond to an email from MarketWatch inquiring about the seller.

Also read: ‘No one is throwing good money after bad.’ Why 2024 looks like trouble for commercial real estate.

Newmark

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said it received 18 offers for the Aon Center, which was constructed in 1974 and extensively renovated in 2020.

The 1.1 million-square-foot Aon Center, located at 707 Wilshire Boulevard, was 64% leased at the time of the sale, with tenants including Aon and international law firm Morrison & Foerster, Newmark said.

The building has a “diverse roster of tenants,” Newmark said, with the largest tenant occupying no more than 7% of the space.

The pandemic has led to occupancy challenges for office buildings, with the overall vacancy rate hitting a 30-year-high of 18.2% in the second quarter. According to Jones Lang LaSalle Inc. JLL, -0.46% data, the physical U.S. office occupancy rate was 40% to 65% in the spring of 2023.

Also read: Do not disturb: Tenants brace for more office landlords to go belly-up on their property debts



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