Dealmaker: Douglas Emmett Pays $140M For Santa Monica Office Building

Douglas Emmett, Santa Monica, Calif., acquired 233 Wilshire Boulevard in Santa Monica, a 129,000-square-foot Class A office property, for $139.5 million.

The real estate investment trust will hold the property in a joint venture with institutional investors including Qatar Investment Authority.

That joint venture, which also acquired 12100 Wilshire Boulevard in July, borrowed $56 million for this purchase under a secured, non-recourse interest-only loan that bears interest at LIBOR plus 1.55 percent. It matures in July 2019.

When purchasing the property, Douglas Emmett reduced its capital interest in the consolidated joint venture to 20 percent by selling partial interest to another sovereign wealth fund investor. The firm’s portfolio now includes 67 office properties totaling 17.6 million square feet as well as ten apartment communities in Los Angeles and Honolulu comprising 3,336 units. 

For QIA, this acquisition represented a way to significantly expand its U.S. investment portfolio following other large investments including purchasing a 9.9 percent interest in the Empire State Building. QIA announced plans last year to invest $35 billion in North America over five years. 

Earlier this year, Douglas Emmett closed a non-recourse $360 million interest-only loan that will mature in June 2023. A five office property pool secures the loan. The loan bears interest at LIBOR plus 1.55 percent, fixed at 2.57 percent until July 2021 through an interest rate swap. It used $256 million to pay down the remaining outstanding balance of its existing loan scheduled to mature in April 2018.