Santa Monica
LOOKOUT
Traditional Reporting for A Digital Age

We Love Property Management Headaches!

Harding, Larmore
Kutcher & Kozal, LLP

By Jonathan Friedman
Associate Editor

April 28, 2017 -- Major area property owner Douglas Emmett announced this week that the company has acquired two Downtown Santa Monica office buildings from the Blackstone Group for a combined $352.8 million.

The acquisitions, which were purchased through a joint venture with the Qatar Investment Authority, a sovereign wealth fund of the Arab state, are an 11-story building at 1299 Ocean Avenue and a seven-floor structure at 429 Santa Monica Boulevard.

Per square foot, the purchase price was $1,205, which is one of the highest amounts ever paid for a large office complex in the area, according to the Los Angeles Business Journal.

It is likely the highest price per square foot paid for a large commercial building in Santa Monica, according to local real estate observers.

The Qatar Investment Authority has been making "private sector investments covering many countries around the world," The Peninsula, Qatar's daily newspaper, reported this month.

The "strategic" investments by Qatar "are selected and carefully planned to yield large revenues in the long term and to be income resources for the future generations," Qatar Chamber chairman Sheikh Khalifa bin Jassim Al Thani said in the April 3 article.

Qatar's overseas investments policy "relies on adopting investment opportunities with least risk and maximum profit," according to the article.

When the Ocean Avenue property’s potential purchase price of $287 million was first reported in the Real Deal in March, the proposal Douglas Emmett was putting on the table “blew the pack (of competitors) away,” the real estate magazine reported.

Real estate development consultant Robert O. York told The Lookout earlier this month, "Once you break $1,000 a square foot, you're in pretty rarefied air and that's becoming more typical" (“Santa Monica Commercial Property Prices Hit Record Highs,” April 11, 2017).

With the two purchases, Douglas Emmett’s Santa Monica holdings increased to 11 structures, according to its website.

Among the other properties the publicly traded company owns are the 21-story office building at 100 Wilshire Boulevard and the more than 220,000-square-foot OneWest Bank building at 401 Wilshire.

The company has many more holdings in Southern California and Honolulu.