02/19/2010

Fund Shop Looking to Refinance LA Complex

LBA Realty is seeking a $130 million mortgage on AT&T Center in Los Angeles.

The loan would equal about 60% of the office complex's estimated $220 million value. LBA is pursuing a five-year loan, with either a fixed or floating rate. The fund operator would use most of the proceeds to retire a $105 million loan from MetLife that matures this spring.

LBA's advisor, Eastdil Secured, is shopping the assignment to regional banks, foreign banks, insurance companies and securitization programs.

The 1 million-square-foot complex encompasses the 32-story Tower Building (formerly known as SBC Tower), at 1150 South Olive Street, and the 11-story Hill Building, at 1149 South Hill Street.

LBA bought the buildings in 2005 for $129 million from a joint venture between Canyon-Johnson Urban Fund and New Pacific Realty of Los Angeles. It funded the acquisition with the interest-only MetLife loan, which consisted of a $65 million fixed-rate portion and $28 million floating-rate portion that were funded up front, plus $12 million that was drawn down over time for capital expenditures and leasing costs.

The buildings were formerly part of a three-building complex called Transamerica Center. The other tower, with 492,000 sf, is now called the Broadway Building and is owned by the City of Los Angeles.

LBA, of Irvine, Calif., spent $35 million renovating the two buildings, rebranding them as AT&T Center. As part of the upgrade, it added a two-story, lit crown to the top of the Tower Building.

LBA has signed or renewed leases for some 400,000 sf in the past few years. Transamerica signed a new lease in 2008, locking up 260,000 sf for 10 years. The occupancy rate is now 85-90%. Other major tenants include AT&T and the University of Southern California.

LBA was founded in 1991 as Layton-Belling Associates by Steve Layton and Phil Belling. Acquisitions are overseen by Belling and principals David Thomas and Bill Kearns.

Since 1995, LBA has acquired more than $4 billion of real estate via six funds. Its latest vehicle, LBA Realty Fund 4, raised $750 million of equity last year and is about 10% invested.

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