Silverstein Properties Buys LA’s US Bank Tower For $430 Million
The iconic property is selling at a massive discount from its year-end valuation, with the price driven down by the pandemic
By Greg Cornfield July 17, 2020 5:20 pm
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It’s one of the tallest buildings west of the Mississippi River, but its sales price has fallen far short of what its owners originally wanted.
Singapore-based OUE Limited announced it will sell the U.S. Bank Tower in Downtown Los Angeles for $430 million, a 31 percent discount from the building’s $650 million valuation as recorded in the firm’s 2019 year-end report. The buyer is USBT Property Owner LP, which is tied to New York City-based Silverstein Properties, filing records show. The deal is set to close in September
Business Times Online first reported news of the deal.
The price was reached “after taking into account, among other things, the market value of the property and the current U.S. property market conditions in the relevant sectors amid the COVID-19 pandemic,” according to a filing released by OUE Limited today.
“Due to the measures implemented by state governments in the U.S. in response to the COVID-19 pandemic, the tenants in the property have reduced, or temporarily closed down, their operations, and the rental income from the property has been correspondingly affected.”
OUE Limited acquired the U.S. Bank Tower at 633 West Fifth Street, between Fourth and Fifth Streets, for $367.5 million in June 2013, according to property records.
The office market in L.A. dropped swiftly in the second quarter this year following the coronavirus outbreak. Leasing activity dropped 52 percent compared to the first quarter this year — the lowest period of leasing since the Great Recession. The limited number deals that occurred were also in Downtown L.A., including L.A. Department of Water & Power’s 132,500-square-foot lease at 233 South Beaudry Avenue, and the U.S. Army Corps of Engineers’ 100,000-square-foot renewal at 915 Wilshire Boulevard. Both are less than a mile from the U.S. Bank Tower.
Silverstein has stayed busy this year amid a volatile market. The firm is teamed up with developers Kaufman Astoria Studios and Bedrock Real Estate Partners on Innovation QNS — a $2 billion plan for a 2.7-million-square-foot mixed-use project in Queens in New York City. Silverstein and UBS Realty Investors also secured a $510 million in refinancing for the 2-million-square-foot office and retail property at 120 Broadway, which is near the World Trade Center where Silverstein owns several properties.
