Glendale Office Sells for Almost 60% Less Than Its 2017 Price
$94 million in financing from JPMorgan Chase Bank tied to the property
By Greg Cornfield December 11, 2023 4:25 pm
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Kennedy Wilson (KW) is the latest landlord to cut ties with an office in Southern California at a considerable loss.
The Beverly Hills-based real estate investment trust sold the property at 400 and 450 North Brand Boulevard in Glendale for $60 million, or $136 per square foot, according to property records filed with L.A. County and first reported by The Real Deal. KW had acquired the 441,000-square-foot complex from Beacon Capital Partners for $144.1 million in May 2017, or about $327 a foot. An entity managed by Ben Li acquired the asset from KW.
JPMorgan Chase (JPM) Bank provided $94 million in financing for the property in May 2022. KW did not immediately return a request for comment from Commercial Observer. The largest tenant, Dine Brands, left after its 106,000-square-foot lease expired in April, according to TRD.
The sale further demonstrates commercial real estate’s collapsing values, a trend particularly pronounced in Southern California’s office market. Compared to last year, the volume of office sales in L.A. County fell 51 percent while the average sales price per square foot dropped 42 percent, according to the most recent market reports.
KW, which has $25 billion in assets under management, reported $92.2 million in losses in the third quarter.
“With high levels of inflation, interest rates at multi-decade highs, and rising geopolitical issues, the global investment environment continues to face headwinds,” William McMorrow, chairman and CEO of KW, said in a statement with the firm’s quarterly earnings report. “These factors have impacted our results due to non-cash, mark-to-market adjustments in our fair value portfolio for assets, which are generally being held as long-term investments in well-capitalized joint ventures with institutional partners and are currently producing excellent net operating income.”
Gregory Cornfield can be reached at gcornfield@commercialobserver.com.
