Playa Vista Office Buildings Sold at Significant Loss

LaSalle Investment Management Sells Playa Vista Office Buildings at a Loss

LaSalle Investment Management recently sold two office buildings in Playa Vista for a total of $74.3 million, indicating a significant decrease from the $140 million purchase price in 2017. The larger property, a 132,000-square-foot building on Alla Road, was acquired by Westside Neighborhood School for $50.3 million, while the 48,400-square-foot building on West Jefferson Boulevard was purchased by Pacshore Partners and A2 Capital Management for $24 million. Notably, both buildings offer unique features, with the Alla Road property boasting editing bays and production soundstages, and the West Jefferson Boulevard building fully leased to IPG Mediabrands. This sale showcases an intriguing trend of heightened market liquidity, particularly in sought-after areas like Playa Vista.

Key Takeaways

• LaSalle Investment Management sold two Playa Vista office buildings for $74.3 million, half their 2017 purchase price.
• Westside Neighborhood School acquired The Annex on Alla Road for $50.3 million, equating to $381 per square foot.
• Pacshore Partners and A2 Capital Management purchased a 48,400-square-foot property on West Jefferson for $24 million.
• Both properties were previously obtained by LaSalle for a combined $140 million in 2017.
• Newmark brokers represented LaSalle in the sales, while NAI Capital represented Westside Neighborhood School.

Analysis

LaSalle Investment Management's decision to sell the Playa Vista office buildings at a substantial loss reflects shifting market dynamics, potentially stemming from overvaluation in 2017 or alterations in office space demand. The buyers, Westside Neighborhood School and a joint venture between Pacshore Partners and A2 Capital Management, stand to benefit from reduced acquisition costs. In the short term, these transactions may prompt market adjustments in real estate pricing within Playa Vista. In the long run, they could influence investment strategies in technology-centric areas, possibly leading to more conservative valuations and diversified property usage, such as educational or media-focused facilities.

Did You Know?

• LaSalle Investment Management: A global real estate investment manager that advises on behalf of pension funds, insurance companies, and other institutional investors. They specialize in real estate equity and debt investments across various property types and geographies.
• Playa Vista: A neighborhood situated in the Westside of Los Angeles, California, renowned for its strong presence in the technology and creative industries, often referred to as "Silicon Beach" due to its concentration of tech companies and startups.
• IPG Mediabrands: The media and marketing solutions division of Interpublic Group (IPG), a leading global provider of marketing solutions. They administer and innovate media and marketing solutions on behalf of their clients through their network of media agencies.