This is a signal of an economic disaster for the city of Los Angeles. Since this building went down in value by 52%, its property tax will also go down by the same amount. As that happens, all the buildings in the area will ask for massive reductions in property taxes. As this spread the massive L.A. budget deficit will grow. L.A. will go the way of San Fran—owners of buildings will be unable to sell—and some, like in San Fran will just turn the buildings back to the banks.
“A Los Angeles office building located near Century City and Beverly Hills sold for about 52% less than its price five years ago.
Harbor Associates and F&F Capital Group bought the five-story property at 1640 Sepulveda Blvd. for about $44.7 million, according to a statement Tuesday. The building last sold in 2018 for $92.5 million.
LA Office Building Sells at 52% Less Than 2018 Price
- Buyers acquire the five-story property for $44.7 million
- Harbor Associates says distress is starting to hit the market
By Katherine Chiglinsky and John Gittelsohn, Bloomberg, 12/26/23 https://www.bloomberg.com/news/articles/2023-12-26/los-angeles-office-building-sells-at-52-less-than-2018-price?leadSource=uverify%20wall
A Los Angeles office building located near Century City and Beverly Hills sold for about 52% less than its price five years ago.
Harbor Associates and F&F Capital Group bought the five-story property at 1640 Sepulveda Blvd. for about $44.7 million, according to a statement Tuesday. The building last sold in 2018 for $92.5 million.
It’s the latest sale of an LA office building in a market that’s been pressured by the rise of remote work and financing challenges brought about by soaring interest rates. Recently, the Aon Center in downtown LA sold for $147.8 million, about 45% less than its previous purchase price in 2014.
The building at 1640 Sepulveda Blvd. was constructed in 1987 and has had more than $11 million in renovations, including upgrades to tenant spaces as well as a redesigned lobby. It was 80% occupied at the time of the deal’s closing, according to the statement.
“After several years of kicking the can down the road, we are now beginning to see distress hit the market,” Harbor Principal Joon Choi said in the statement. “There are still compelling opportunities to find the hidden gems at a deep discount to replacement.”
The deal is the second real estate acquisition for the joint venture in the past two months. Harbor and F&F acquired an industrial portfolio in Carlsbad, California, for about $21 million in November.
