(Bloomberg)—Boston Properties Inc. agreed to buy a 50 percent stake in a Los Angeles-area office complex from Blackstone Group LP for about $500 million, marking the real estate investment trust’s first purchase in southern California, according to a person with knowledge of the matter.
The landlord is acquiring an interest in the Colorado Center in Santa Monica, said the person, who asked not to be named because the transaction is private. The six-building campus is in an area known as Silicon Beach, a stretch of oceanfront communities that’s popular with technology companies.
Arista Joyner, a Boston Properties spokeswoman, declined to comment, as did Christine Anderson, a Blackstone spokeswoman. Daisy Okas, a spokeswoman for TIAA Global Asset Management, which owns the other 50 percent of the complex, also declined to comment. The transaction was reported Wednesday by the Los Angeles edition of The Real Deal.
Boston Properties, the largest U.S. office REIT, has long had a goal of entering the Los Angeles market, said Alexander Goldfarb, an analyst with Sandler O’Neill & Partners LP. The company has historically been almost entirely focused on midtown Manhattan, the San Francisco Bay area and its Boston-area home market.
“After a decade-plus of Boston Properties angling for a way to buy into the westside L.A. office lifestyle, it seems that the company has finally been able to plant its flag near the Santa Monica beaches,” Goldfarb wrote in a research note after the Real Deal report. “Boston Properties’ fortress balance sheet makes it well-suited for these sorts of purchases.”
The Colorado Center is a 15-acre (6.1-hectare) complex with more than a million square feet of offices. It also has a 3.5-acre park with tennis, basketball courts and a playground, plus a full-service gym, according to a brochure on the website of Blackstone’s Equity Office unit.
About 37 percent of the space in the six buildings is available, including one building that is fully vacant, according to data from CoStar Group Inc. Tenants include Hulu, Yahoo! Inc., Riot Games Inc. and eHarmony. Until 2012 it was named Yahoo Center, according to a 2012 story in the Santa Monica Daily News.
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