Wells Fargo has provided a $580 million loan to Douglas Emmitt Realty for the acquisition of a four-building office portfolio in Los Angeles, California.
The interest-only, seven-year loan carries a 43 percent loan-to-value based on the $1.34 billion acquisition price. The rate is floating at Libor plus 1.40 percent, which has been fixed at 2.37 percent for five years through an interest rate swap.
Douglas Emmett, which purchased the portfolio from Blackstone with joint venture equity partner Qatar Investment Authority (QIA), becomes the largest office landlord in the Westwood neighborhood of Los Angeles with the purchase.
Blackstone purchased the assets as part of its 2007 takeover of Equity Office Properties Trust.
The portfolio of 90 percent leased 22- to 24-story properties — at 10880, 10940 and 10960 Wilshire Bloulevard and 1100 Glendon Avenue — total 1.7 million sq ft. Major tenants include Oppenheimer Companies, SONY, Adecco Employment, Regents of University of California and Viacom International.
Douglas Emmett plans to retain 20-30 percent of the equity in the joint venture, with the remaining interests being held by institutional partners. The firm’s commercial portfolio now consists of 66 office properties totaling approximately 17.2 million rentable sq ft.
Douglas Emmett also owns ten premier apartment communities in Los Angeles and Honolulu with a total of 3,336 units. QIA in 2015 announced plans to invest $35 billion in North America over five years.
The borrower and lender did not respond to requests for additional comment in time for publication.