NEWPORT BEACH — JH Real Estate Partners has acquired the 330,000-square-foot FIGat7th retail center from Brookfield Properties for $68.5 million, as the latter continues to exit downtown Los Angeles.
CoStar property records show that the 10-acre open-air retail center in the city’s financial district, at 735 S. Figueroa St., traded for $207 per square foot and at a 7.5% cap rate.
With the purchase, Newport Beach-based JH Real Estate, adds the shopping center to its growing retail portfolio, which includes the 17th Street Promenade in Costa Mesa, Bristol Center in Santa Ana and NoHo Commons in North Hollywood.
In 2018, JH Real Estate paid about $46.5 million, or about $280 per square foot, for the nearly 166,000-square-foot Bristol Center in Santa Ana.
JH did not respond to a request for comment. Brookfield also did not respond.
JH Real Estate has acquired more than $329 million in retail assets over the past five years, according to CoStar records.
Built in 1986 and renovated in 2012, the three-story FIGat7th is 86% leased, with storefronts including Target, Nordstrom Rack, Zara and CVS. According to CoStar, more than 100,000 office workers are within a five-minute walk.
Prime Southern California retail centers often sell for around $1,000 per square foot. One example is Cedars-Sinai’s acquisition of the Beverly Connection earlier this year. The price JH Real Estate paid is only slightly more than the $40 million that Brookfield paid to renovate the open-air lifestyle center in 2012.
Brookfield’s Woes
Brookfield sold the retail center, located next to the 777 Tower and a few miles east of LA Live and the Los Angeles Convention Center, as the company faced a looming $61.7 million MetLife loan that put significant pressure on its finances.
The New York-based real estate investment firm initially acquired the open-air lifestyle center in 2006 as part of Brookfield’s multi-billion-dollar acquisition of Trizec Properties Inc., according to California Apparel News.
A few years later, Brookfield placed it in an affiliate-owned multi-asset portfolio that included offices totaling 3.57 million square feet such as the Figueroa at Wilshire, Ernst & Young Plaza and Bank of America Plaza.
However, Brookfield’s Downtown LA Fund bled money for years, as downtown LA’s financial district struggled to return to pre-pandemic office routines.
Brookfield’s fund defaulted on more than $1.1 billion in debt tied to the nearby Gas Company Tower and 777 Tower, according to reports.
