Passco Cos. received 10 offers from investors for the Howard Hughes Center, a 248,841-square-foot retail property. Earlier this week, GlobeSt.com reported that the Laurus Corp. purchased the property for $111 million and plans to invest an additional $30 million for renovations. Now, the seller’s team tells us that the sale was very competitive with a broad range of investors bidding on the property.
“We had a very competitive bid environment for this two-level entertainment-oriented retail asset,” Bryan Ley, managing director at HFF, tells GlobeSt.com. “We had all types of investors interested in the asset from institutions and regional groups to foreign capital sources. The most competitive groups realized the need to continue the seller’s business plan of upgrading the asset quality to make it a top-tier retail asset in Los Angeles.” Ley represented the seller in the transaction along with his colleague, HFF director John Crump.
Ley adds that Passco decided to sell the property because it had completed its business plan, which was to hold the property for 10 years. “The sale was right on par with that 10-year period and with their upcoming loan maturity,” he says.
In addition to representing the seller in the transaction, HFF also secured preferred equity through Torchlight Investors and senior financing through a major money center bank for the Laurus Corp. “The buyer gained a competitive senior loan at market rates and then preferred equity, which would allow them to complete their business plan of redeveloping the asset into a top-tier and modern retail center,” says Ley. “That additional capital is necessary to bring the marquee tenants that they are currently in discussions with.”
Like, the competition from investors who realized the inherent value of the property, lenders also saw the value in the property and there was no trouble securing the funds for the Laurus Corp. “With tremendous growth in the surrounding market of Howard Hughes Center and Playa Vista, there is so much velocity and growth going that capital and lenders want to be in this area,” Ley adds. “The lenders here and the buyer both share the same business plan for the future of the asset.”
This article was originally published on GlobeSt.com.