LaSalle Investment Snags $93M Refi for Silicon Beach Offices
LaSalle Investment Management snagged a $93.4 million refinancing for two creative office properties in Los Angeles’ Silicon Beach.
The debt will refinance the existing loan and fund leasing expenses to stabilize the properties, located at 12901 West Jefferson Boulevard and 5340 Alla Road in Playa Vista.
Charlotte, N.C.-based investment firm Barings provided the financing, according to L.A. County property records. The five-year, non-recourse floating rate loan closed this week with interest-only payments for the full term. Representatives from Barings did not return requests for comment.
Property records show LaSalle Investment purchased both properties in January 2017 for a combined $140 million. The Class A buildings include 180,354 square feet of space, and are 70 percent leased.
The property at 12901 West Jefferson is fully leased to Steelhead, which is a creative production studio for a marketing agency called Deutsch. The 5340 Alla Road property, called “The Annex,” is located around the block and is currently 60 percent leased to tech, advertising and media companies.
Brad Zampa, Greg Grant, Steve Roth and Megan Woodring of CBRE (CBRE) arranged the financing.
“The depth of capital available to institutional borrowers continues to surprise our team, particularly on our larger West Coast executions,” Zampa said in a prepared statement. “There was significant interest from life companies, banks, CMBS lenders and debt funds due to the strategic location, strong sub-market fundamentals and best in class sponsorship.”
Playa Vista and the Westside of L.A. County have been swarmed by big tech and media firms, such as Google (GOOGL), Netflix (NFLX), Apple (AAPL) and Nike. In the last 24 months, the Westside saw more than five million square feet of new leasing activity from a number of large tech and media companies, according to CBRE.
“West Los Angeles is one of the most supply-constrained office markets in the country,” Grant said. “Lenders are eager to put money to work in Playa Vista in particular, which is arguably the most coveted submarket in all of Silicon Beach.”
Playa Vista was one of seven districts in Greater L.A. to boast asking lease rates above $5 per square foot per month after the final quarter of 2019, according to CBRE’s office report released last week. The rate is $5.32 per square foot on the Westside, where there is about 2.7 million square feet of office space currently under construction. Its vacancy fell to 9.3 percent, well below the average market rate.
Facebook moved into 260,000 square feet of space at Tishman Speyer’s Brickyard campus last year, advancing the creative and tech industries’ prevalence in leasing large blocks. Nike signed for more than 90,000 square feet at the 6.5-acre Water’s Edge campus, which was developed by Rockwood Capital and Marshall Property & Development on Lincoln Boulevard. Google is also taking over the 525,000-square-foot Spruce Goose property, which was converted from a former aircraft hangar. Finally, a 33-acre workplace destination called Playa District, that was developed by EQ Office and operated by Industrious, opened last year.
Barings is a $338-billion financial services firm. Last summer, the firm provided $125 million to refinance Decron Properties’ multifamily site in Playa del Rey near LAX.
Correction: This story has been updated to clarify that Barings is based in Charlotte, N.C.