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Hilton Foundation Snags Dole Food Headquarters for $50 Million

Non-Profit Plans to Move Its Corporate Home to 10-Acre Site in L.A.'s Westlake Village
September 14, 2018
Dole Food Co., struggling under the weight of legal and corporate debt, has sold its campus in Ventura County, California.

Conrad N. Hilton Foundation bought the headquarters building of Dole Food Co. for $50 million in a deal that marks the latest divestiture as the fruit and vegetable producer tries to reduce debt, which reached $1.3 billion before the company put the property on the market.

CBRE Group Inc. represented Dole Food in the sale of the 168,000-square-foot corporate campus on more than 10 acres at One Dole Drive, which has served as headquarters for the iconic American brand for more than 20 years. Dole will lease back a portion of the building.

The sale comes after Dole last year announced the closing of its strawberry operations in Oxnard, California, and other facilities in the state. Dole also disclosed in regulatory filings last year that it would need to sell its holdings in Hawaii and the U.S. mainland to pay debt.

The Hilton Foundation, a non-profit organization founded by the patriarch behind the Hilton hotel chain, agreed late last year to lease more than 20,000 square feet on a temporary basis during remodeling work at Hilton's 23,000-square-foot headquarters building in nearby Agoura Hills, according to a source close to the transaction.

However, the foundation decided this past spring to buy the three-story building. Dole, owned by Los Angeles billionaire David H. Murdock, was at that time in the process of finalizing the $300 million sale of a 45-percent stake in the company to Dublin, Ireland-based produce distributor Total Produce.

That deal closed July 30, with terms that allow Total Produce to acquire an additional 6 percent of Dole's stock at any time, giving the Irish company a majority stake.

"A sale process has commenced for this business," Total Produce noted in an Aug. 30 investor presentation on its 2018 financial results.

A similar sale to another European produce company, Belgium-based Greenyard, fell through in early January on the same day that Dole withdrew a proposed $400 million initial public offering, the latest in a series of financial maneuvers by the 95-year-old Murdock and his representatives to reduce the company's heavy debt burden.

After taking Dole public in 2009, Murdock bought back 60 percent of its shares in 2013, a move that prompted shareholders to file two lawsuits alleging that Murdock reduced Dole's value so he could pay less to buy back the company. One lawsuit resulted in a settlement agreement for Murdock to pay shareholders $78 million. In the other lawsuit, a Delaware judge in 2015 ordered Murdock to pay $148 million to former shareholders, driving up costs for the company.

Dole last year reported $1.3 billion in debt and quietly began shopping the headquarters campus, at one point proposing to trade the property for Dole Plantation, a popular tourist attraction in Oahu, Hawaii.

The headquarters building is across the street from the Four Seasons Westlake Village, which is also owned by Dole. CBRE said Dole would still occupy a portion of the building as its headquarters.

Dole did not immediately return requests seeking comment on the sale or the status of its other U.S. real estate holdings. Those include owned and leased food processing and agricultural operations in California, Hawaii, Arizona, Ohio and North Carolina, according to CoStar information.

Todd Tydlaska, part of the CBRE team that represented Dole in the building sale, said “we’ve seen great activity among users who want to own the properties they occupy" as a result of rising Southern California office rents in recent years.

Westlake Village has accounted for nearly 60 percent of the net absorption in the 12 million-square-foot Conejo Valley office market since 2011, with a number of new and expanding biotech and tech firms taking space, he added.

CBRE's Sean Sullivan, Mike Longo, Tom Dwyer and Michael Slater were also on the team representing Dole in the sale.

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