The owners of Broadway Plaza, a highly successful office, hotel and retail complex in downtown Los Angeles, are negotiating to sell the property to a group of Japanese investors for an estimated $200 million to $225 million.
A source said Tuesday that CESD USA, a Japanese firm negotiating for a syndicate financed by Yasuda, a large Tokyo-based real estate company, has agreed in principle to buy the property from Plaza Development Associates, an investment group headed by Sam Zell of Chicago.
However, Richard W. Klatte, director of administration for Plaza Development Associates, said the company has been talking with various Japanese-owned groups about a sale but that no agreement has been reached.
A sale of Broadway Plaza--bounded by Seventh, Eighth, Flower and Hope streets--would continue a rash of office building acquisitions in Los Angeles by Japanese interests. Among other buildings, the Bank of America/Arco Tower complex was sold last year to Shuwa Investments Corp. for $620 million, and in January, Sumitomo Life Insurance paid $145 million for the post-modern 1000 Wilshire office building.
When Broadway Plaza opened with great hoopla in 1973, it featured the first major department store built downtown in 50 years. The 250,000-square-foot flagship store of the Broadway chain joined the Hyatt Regency Hotel, the 678,000-square-foot 700 Flower office tower and a two-level galleria lined with specialty shops and restaurants filling an additional 100,000 square feet.
It was devised in part as a result of a need by Broadway-Hale Stores (now Carter Hawley Hale Stores) for a new flagship Broadway store. "It was just too expensive to attempt to build just a department store downtown," architect Charles Luckman said at the time. "But Ed Carter (chairman of Broadway-Hale) and I had the belief that if a renaissance of downtown was to be, the retail facilities were a necessity."
The cost of the overall project was $150 million, with Prudential Insurance Co. providing $65 million of the financing. It was initially a joint venture of Broadway-Hale Stores, Prudential and Plaza Development Associates, composed of Zell and investors from the Hyatt hotel chain.
Carter Hawley Hale and Prudential sold their interests in 1984 to Plaza Development, which started looking for a buyer early this year.
In another development involving Japanese investment, a landmark 21-story story office building at 100 Wilshire Blvd. in Santa Monica was sold Tuesday to an unidentified Japanese investor by a unit of Southmark Pacific Corp., a Los Angeles-based subsidiary of Southmark Corp. Bank of America's Investment Real Estate Group, which served as adviser, said the price was "less than $100 million."