Thomas Properties has struck an agreement with its investment partner,… (Irfan Khan / Los Angeles…)
Los Angeles commercial property landlord Thomas Properties Group Inc. has struck an agreement with its longtime investment partner that would allow Thomas to take full ownership of mammoth City National Plaza in downtown Los Angeles and other properties.
“We want to increase the number of properties we wholly own or control,” Chief Executive James A. Thomas said. “This is a transformative opportunity for us.”
Thomas Properties formed a joint venture with the California State Teachers’ Retirement System in 2003 to acquire and upgrade the former Arco Plaza in downtown Los Angeles. The 2.5-million-square-foot office and retail complex had been neglected by its former owners and was only about 20% occupied.
Thomas signed City National Bank as the primary tenant and the property at 5th and Flower streets with twin 51-story office towers is now 90% leased. Tenants include the architecture firm Gensler and two upscale restaurants.
“We think it’s a terrific asset and we would like to hold it,” Thomas said.
Thomas and CalSTRS also acquired five commercial properties in Houston and northern Virginia. Thomas has until the end of the month to exercise an option to buy out the pension fund’s interests in some or all of the properties.
Thomas would have to pay CalSTRS $678 million to take full control of all of the properties. CalSTRS is ready to cash out
“We determined that now is the time to monetize our investment in this venture, and we look forward to continuing our successful relationship with Thomas Properties,” said Mike DiRe, managing director of real estate for CalSTRS.
Thomas is in “advanced discussions” with other capital providers to help Thomas Properties buy out CalSTRS, he said. “We’re working hard to pull it off.”
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