Apollo dealing net-leased offices

Real Estate Alert, June 23, 2004

A joint venture led by Apollo Real Estate Advisors is marketing a net-leased office complex in Southern California.

The 448,000-square-foot property, at 21555 Oxnard Street in Woodland Hills, could sell for about $120 million, or $267/sf. At that price, the buyer's initial annual yield would be 6%. Secured Capital is handling the listing for Apollo and its partner, Beverly Hills investor Avi Lerner.

The property is leased through 2019 to WellP0int Health Networks (formerly Blue Cross of California), which is rated A-minus. The lease calls for annual rent increases tied to the consumer price index.

The complex, within the giant Warner Center office park, consists of a 13-story office building and three one-story service buildings--a visitor center, training center and cafeteria. The buildings are two blocks north of U.S. Highway 101.

The complex was built in 1977. Apollo's first opportunity fund teamed up with Lerner to buy the property in 1993 from a JMB Realty partnership, which in turn had acquired it from Blue Cross in a sale/leaseback transaction. The Apollo team unsuccessfully marketed the property in 1996.