Los Angeles office complex

Real Estate Alert, Feb 18, 2004

Kearny Street Real Estate is under contract to pay $67.3 million, or $97/sf, for Airport 1-3, a three-building complex at 5959-6151 West Century Boulevard and 9841 South Airport Boulevard in Los Angeles. The price is expected to provide an initial yield of 9% for the vehicle, which is backed by Morgan Stanley Real Estate Fund.

The property is 70% occupied, primarily by professional tenants under leases that run five or less years. The property's value is enhanced by two large garages, which can serve 4,100 cars. The three buildings are located near Los Angeles International Airport, on land that is leased from KOAR Partners of Pasadena, Calif. The seller is a joint venture between GE Capital Advisors, which foreclosed on the property in the early 1990s, and Chicago-based Jupiter Realty. Secured Capital is handling the sale.