Douglas Emmett, Inc., a real estate investment trust, announced acquisition of a 129,000 square foot Class "A" office property for $139.5 million at 233 Wilshire Boulevard in Santa Monica, California.
The 94% leased property is located at the entrance to the Santa Monica Third Street Promenade, and features panoramic views of the Santa Monica Bay and Coastline. According to Douglas Emmett, “the property will be held by an existing consolidated joint venture with institutional investors including Qatar Investment Authority. That joint venture, which also acquired 12100 Wilshire Boulevard in July, borrowed $56 million for the purchase under a secured, non-recourse interest only loan that matures in July 2019 and bears interest at Libor plus 1.55%."
Concurrent with the purchase of the property, Douglas Emmett reduced its capital interest in the consolidated joint venture to 20% through the planned sale of a portion of its interest to another sovereign wealth fund investor, DE officials said. “These transactions did not affect the separate consolidated joint venture that acquired four buildings in Westwood in February 2016 and in which Douglas Emmett currently holds a 30% capital interest.”
Douglas Emmett's total office portfolio now consists of 67 office properties totaling approximately 17.6 million square feet. Douglas Emmett also owns ten premier apartment communities in Los Angeles and Honolulu comprising 3,336 units.
For Qatar Investment Authority, this acquisition represents another step in its plans to significantly expand its US investment portfolio, and follows other large investments in real estate, such as the Manhattan west project in New York City last year, the acquisition of the Westwood Office portfolio with Douglas Emmett earlier this year, and the recent acquisition of a 9.9% interest in Empire State Realty Trust. In 2015, QIA announced plans to invest $35 billion in North America over five years, officials said.