Douglas Emmett Seeks Floater on LA Offices
Douglas Emmett Inc. is in the market for $400 million of fresh debt on four Los Angeles office buildings.
The properties encompass nearly 1.2 million square feet of space in the Brentwood, Century City and Encino submarkets. The borrower prefers a floating-rate mortgage with a term of five years and prepayment flexibility in the final two years. Eastdil Secured is pitching the assignment for the Santa Monica, Calif., REIT.
Market sources expect the financing to achieve thin pricing. Douglas Emmett is considered a high-quality sponsor, owning a number of well-occupied, Class-A properties in strong submarkets around Los Angeles, and typically employs low leverage. Amid heated competition for such assignments, loan spreads have narrowed over the past few months, reaching as low as 100 bp over one-month Libor in some cases.
Douglas Emmett acquired the four properties in separate transactions between 1996 and 2001.
The largest is the 479,000-sf property at 1901 Avenue of the Stars in Century City. The 20-story building was developed in 1968 and renovated several times since, including in 2001. It’s adjacent to the Westfield Century City upscale mall. The upper floors have views of the Pacific Ocean, Santa Monica Mountains and downtown Los Angeles.
The other properties are at:
15760 Ventura Boulevard in Encino (295,000 sf). The 20-story building, called Encino Gateway, was developed in 1974 and acquired in 2000.
12400 Wilshire Boulevard in Brentwood (247,000 sf). The 15-story building, finished in 1985, was purchased in 1996.
11777 San Vicente Boulevard in Brentwood (99,000 sf). The nine-story building is on Brentwood’s main office corridor. Built in 1974, it was acquired in 1999.