Newport Beach real estate investors Saunders Property Co. and KBS Realty Advisors are cashing out of a pair of office towers in Los Angeles County to the tune of $441.5 million.
In Pasadena, Saunders Property recently closed on the sale of 177 E. Colorado Blvd., a 12-story building on the city’s main thoroughfare and famed route of the Rose Parade.
The privately run investor paid AT&T a reported $81 million for the 300,000-square-foot building in 2014. It previously served as the regional headquarters of PacBell and since the sale got a major renovation. In this month’s sale to Boston-based Rockpoint Group, it went for $161.5 million, or $538 per square foot.
The nearly doubling in price in just three years was $30 million more than what industry observers expected when the building went to market late last year.
John Saunders, who heads Saunders Property, credits another area real estate executive, Russ Werdin of Newport Beach-based commercial developer Werdin Corp., for his firm’s success in its three years as owner of the building.
The 2014 purchase was sourced by Werdin, who’d purchased four other buildings from AT&T and who joined the Saunders team after the acquisition.
“Russ Werdin knew the hidden potential of the property,” Saunders said. “There was a rundown open plaza at one end of the building, but it also was the best corner in Pasadena.”
A 7,000-square-foot Fleming’s Steakhouse and Wine Bar opened last year on the site at Colorado Boulevard and Marengo Avenue. An upscale yoga studio was also added to the property, among other wholesale changes. Saunders estimates he put about $30 million into the upgrade.
The building is believed to be the most valuable non-Orange County real estate property Saunders owned. He also runs Newport Beach-based London Coin Galleries Inc., one of the largest coin dealers in the U.S.
The Business Journal honored his work in the coin business and commercial real estate this year with one of five Excellence in Entrepreneurship awards.
A number of other OC-based firms were part of the team that helped run and renovate the Pasadena building, Saunders said. Jeff Parker and Jameson Co. in Newport Beach headed the property’s repositioning; Ware Malcolm Architects in Irvine led the design team that conceptualized the repositioning and the lobby redesign; and Riverrock Real Estate Group in Newport Beach provided property and construction management services.
The building was nearly 90% leased at the time of the sale, tenants including WeWork, iRobot and Primecap Odyssey Funds.
Union Bank Plaza
About 10 miles southwest of the Pasadena building in downtown L.A., a KBS Realty affiliate is under contract to sell another prominent office tower.
RC Acquisitions, a U.S. affiliate of Canadian real estate investor Pacific Reach Properties, is under contract to buy Union Bank Plaza, a 40-story tower at 445 S. Figueroa St. KBS bought it in 2010 for $208 million through its KBS Real Estate Investment Trust II affiliate in the priciest office deal in Southern California that year.
RC Acquisitions will pay $280 million, according to regulatory filings, or $446 per square foot. The deal hasn’t yet closed.
The skyscraper totals 627,334 square feet and sits on 3.7 acres. Union Bank of California, one of the largest commercial banks headquartered in the state, leases a majority of it.
Neither RC Acquisitions nor Rockpoint Group have recently been reported as buyers of properties in OC.
