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Wedbush Center Sold For $196 Million

Second Largest Trade in Downtown in a Year
March 1, 2018
Lincoln Property Company has closed on its previously announced sale of the Wedbush Center in downtown Los Angeles to Cerberus Real Estate Capital Management for $196 million, or about $411 per square foot.

The 476,491-square-foot, Class A office property last sold in April 2012 for $132 million, or $277 per square foot, according to CoStar data. Lincoln purchased the property from Lehman Brothers Holdings Inc. and Broadway Partners Fund Manager LLC.
See CoStar COMPS #2301542.

The building, located at 1000 Wilshire Blvd., was built 31 years ago on almost a full acre in the Greater Downtown submarket, at the southwest corner of Wilshire and Francisco St., just east of the 110.

The sale comes on the heels of Lincoln Property's recently-completed repositioning plan, which included, "A spectacular lobby renovation which incorporated a new hip cafe and outdoor bar with numerous collaborative seating areas both inside and outside," said Kevin Shannon, co-head of U.S. capital markets at NKF Capital Markets. The renovation cost $4 million, according to the firm.

"The Wilshire Grand recently opened next door to 1000 Wilshire as well, which provided tremendous new energy to the location," Shannon tells CoStar News. "The asset enjoyed a stabilized rent roll and was ready to be sold with the completion of the renovation and opening of Wilshire Grand."

The latest sale marks the second largest in downtown Los Angeles over the past 12 months, according to Steve Basham, a senior analyst with CoStar Market Analytics. It is also the ninth or tenth largest in metro L.A. during that same time period, he notes.

The building is more of middle-of-the-market than a top-of-the-market type of asset, according to Basham.

"It traded right at the average price per square foot for downtown, so the sale didn’t represent a departure from established trends," Basham said. "There’s about 80,000 square feet of vacant space there, a relative drop in the bucket for downtown, so even if it’s managed more aggressively and brought up to full occupancy, it wouldn’t dramatically impact the larger submarket."

Asking rents on the available spaces have come down significantly over the past two years and are a good deal below the average for downtown Los Angeles, added Basham.

In addition to financial services firm Wedbush Securities, which anchors the building in 94,664 square feet, the asset is also home to the Buchalter Nemer Charitable Foundation, Frandzel Robins Bloom & Csato LC and Taylor DeMarco LLP. It is currently 86% leased, according to NKF.

Shannon, Rob Hannan, Laura Stumm, Michael Moll and Ken White with NKF represented the seller.

David Milestone and Brett Green, also with NKF, procured new acquisition financing for Cerberus Real Estate Capital Management.

Please see CoStar COMPS #4151579 for additional information on this transaction.

Karen Jordan, Los Angeles Market Reporter  CoStar Group   
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