Historic Office Buildings in Downtown Los Angeles Go Up for Sale

A three-building office campus in the heart of downtown Los Angeles is now on the market, the latest in a succession of office buildings for sale in the city. The nearly 464,000 square foot PacMutual buildings at 523 W. 6th St. are available for sale, according to marketing materials from Canadian owner Ivanhoé Cambridge.

According to our research, the buildings previously sold for $200 million, or approximately $430 per square foot, in September 2015. The buildings, which were originally constructed between 1908 and 1927, were refurbished by the previous owner, Los Angeles-based Rising Realty Partners, before the sale took place.

When sold in 2015, it was 92.7% leased, however they are now only about 61% leased. According to CoStar data, the decline in occupancy took place during a broader softening of office demand in downtown Los Angeles, which saw vacancy rates increase from approximately 12.5% in September 2015 to about 18.3% this month.

Going off the same data, the downtown Los Angeles office market has an 18.3% vacancy rate, far higher than the greater L.A. average of 14.5%. With the market's average rent is $38.97 per square foot, which is less than the broader Los Angeles average of $42.04 per square foot.

Other office buildings for sale in the city's Arts District include the roughly 340,000-square-foot Trust Building at 433 S. Spring St., the roughly 132,000-square-foot Fourth and Traction building at 963 E. Fourth St., and the roughly 103,000-square-foot Maxwell building at 405 Mateo St. The 700,000-square-foot Union Bank Plaza at 445 S. Figueroa St. is currently pending a sale. However, PacMutual is the latest office building to go up for sale in downtown Los Angeles.

Source: Costar.com