First Citizens Bank Buys Santa Monica Office From Realty Bancorp
Deal is below the value of the debt on the building
By Greg Cornfield January 9, 2024 10:15 am
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First Citizens Bank (FCNCA) and Trust, the North Carolina-based bank that scooped up the collapsed Silicon Valley Bank last year, has acquired a distressed office property in Santa Monica, Calif., at a particularly high price per square foot for the region.
Realty Bancorp Equities (RBE) sold the 76,900-square-foot office building at 1540 Second Street for $86.7 million, according to multiple media reports, a sale equal to more than $1,125 per square foot. The deal comes after the seller defaulted on $109 million in loans tied to the office complex in Santa Monica, per The Real Deal.
Realty Bancorp built the property in 2008 but defaulted on separate loans from Haymarket Insurance in March and April 2023, according to TRD. Records show $79 million was provided in July 2021, followed by $30.1 million almost two months after.
The sale price is an outlier for Southern California’s office market, where office investment sales have declined and property values have dropped dramatically. It joins the few other high-marked properties, including the recent $1,410-per-square-foot sale in Beverly Hills, and JPMorgan’s $745-per-square-foot deal to acquire the Pen Factory in Santa Monica in September 2023.
First Citizens Bank acquired the remnants of Silicon Valley Bank for $72 billion in March 2023.
Gregory Cornfield can be reached at gcornfield@commercialobserver.com.
