Newmark Group Inc. said Friday it arranged the sale of the 62-story Aon Center in downtown Los Angeles for $153.5 million in what the real-estate-development company described as the largest fourth-quarter deal for office space in the Western United States.
Carolwood LP, a Los Angeles-based private-equity firm founded in 2014, is the buyer of the building, which is located in the heart of the city’s financial district.
Carolwood had been a backup buyer in Newmark’s sales process for another Los Angeles property, 801 Grand, which sold for $46 million earlier in the year.
The seller of the Aon Center, San Francisco-based real-estate-management company Shorenstein, paid $268.5 million for the building in 2014, according to a report by CoStar News. A Newmark spokesperson did not respond to an email from MarketWatch inquiring about the seller.
Also read: ‘No one is throwing good money after bad.’ Why 2024 looks like trouble for commercial real estate.
Newmark
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said it received 18 offers for the Aon Center, which was constructed in 1974 and extensively renovated in 2020.
The 1.1 million-square-foot Aon Center, located at 707 Wilshire Boulevard, was 64% leased at the time of the sale, with tenants including Aon and international law firm Morrison & Foerster, Newmark said.
The building has a “diverse roster of tenants,” Newmark said, with the largest tenant occupying no more than 7% of the space.
The pandemic has led to occupancy challenges for office buildings, with the overall vacancy rate hitting a 30-year-high of 18.2% in the second quarter. According to Jones Lang LaSalle Inc. JLL, -0.46% data, the physical U.S. office occupancy rate was 40% to 65% in the spring of 2023.
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