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COMMERCIAL REAL ESTATE

Sale of MGM Plaza Complex to Tishman Speyer Closes

May 16, 2000|BRAD BERTON | SPECIAL TO THE TIMES

One of the Southland's biggest office property sales formally closed escrow last week, as New York real estate giant Tishman Speyer Properties took title to the MGM Plaza office and retail complex in Santa Monica.

As terms of the sale were being finalized more than a month ago, sources told The Times that Tishman Speyer had agreed to pay a group headed by Los Angeles real estate magnate Rob Maguire at least $360 million for the property. But Monday one of the agents participating in the sale, from Cushman & Wakefield, would only confirm a price of "more than $350 million."

The six-building, 15-acre campus includes more than 1 million square feet of offices and supporting retail, restaurant and service facilities, along with a massive subterranean parking facility. The property, which is 99% occupied, is at Colorado Avenue and Cloverfield Boulevard.

Technically, the new owner is a Tishman Speyer affiliate called TST Colorado Avenue. Los Angeles County real estate records indicate that Tishman Speyer financed $260 million toward the purchase with a mortgage loan from an affiliate of Lehman Bros. Holdings Inc.

Maguire engaged Los Angeles-based real estate investment banking firm Secured Capital Corp. and New York real estate services company Cushman & Wakefield to help him sell the property.

David McKenney, a director of Cushman & Wakefield's financial services group who helped negotiate the sale, said about 45 prospective buyers were interested in MGM Plaza. But Tishman Speyer ranked among the few that had sufficient capital sources to buy such a large piece of real estate.

MGM Plaza tenants include entertainment studio Metro-Goldwyn-Mayer Inc. as well as major technology companies IBM, Symantec and Hewlett-Packard. Rents in the surrounding eastern Santa Monica commercial district have risen substantially with the economy's recovery in recent years and the growth of the tech and entertainment sectors.

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