Case: Others

More BPREI case studies.

101 CONTINENTAL PLAZA – EL SEGUNDO, CA

  • Property: 101 Continental Blvd. – El Segundo, CA
  • Scope: 365,000 SF, 15 story office building with underground  and surface parking.
  • Description:
    • BPG acquired the project in 2003 and in 2008 completed a $40M total renovation of both the common areas and tenant spaces.
    • A newly signed ten-year lease with Northrop Grumman Corporation brought the building occupancy to 100% through the year 2019.  The lease with Northrop was the largest lease signed in L.A. County in 2008.  The building is financed by Wells Fargo Bank.
  • Acquired: 2003; Recapitalized in 2007 to fund the major capital improvements.
  • Partners: BPG, The Baupost Group and Prudential Real Estate Investors
  • Return Summary:
    • Project IRR:  55.60%
    • Equity Multiple:  2.87

 

626 WILSHIRE BLVD. – LOS ANGELES, CA

  • Property: 626 Wilshire Blvd., Los Angeles, CA
  • Scope: 168,000 SF, 12 story office building with underground parking.
  • Challenge:
    • 626 Wilshire was built in 1967 as a Class ‘A’ structure for the headquarters of its owner, State Mutual Savings & Loan.  The building was acquired by BPG in 2003 from AEW, whose partner had largely emptied most of the building for conversion to Telecom tenants.  The telecom marketing strategy failed and BPG acquired the building with only 32% leased and a missing elevator.
  • Solution:
    • Barker Pacific quickly restored the building status as a Class ‘A’ property and has attracted tenants who have brought back life into this tower.  Barker Pacific increased its occupancy to 98% from 32% in just over a year after BPG’s acquisition in late 2003.
    • In 2004, the project was sold into a new BPG led venture with Golden Boy Enterprises.  The original J.V. partners (BPG and Baupost) had over a 100% return on investment.  Subsequently, BPG refinanced the building, recouping all of the recapitalized equity, plus $5M.   Debt financing was provided by UBS.  The building continues to be near fully leased.
  • Acquired: 2003; Sold to a new BPG led JV in 2004.  Baupost was original partner.  Project refinanced in 2005, recouping all new equity.
  • Partners: BPG and Golden Boy Enterprises (current ownership)
  • Return Summary:
    • Project IRR:  82.30%
    • Equity Multiple:  1.84