The real estate arm of AXA Insurance Companies is joining a joint venture for a class A Los Angeles office building with Prudential Real Estate Investors (PREI) and an office developer.
Paris-based AXA Investment Managers – Real Assets (AXA IM) bought a 49 percent stake in the three-building property located at 5900 Wilshire Boulevard, the firms said in a joint announcement Monday. Market sources estimate the value of the 49 percent stake to be between $100 million and $150 million. AXA IM purchased the stake from PREI and the Ratkovich Company, leaving the original duo with a 51 percent stake. A spokesman for PREI declined to comment on the price of the sell-off and on the split between Ratkovich and PREI.
The west Los Angeles joint venture comprises a 31-story, class A office tower located between two smaller satellite buildings, with a total of 425,000 square feet, including a gym and art gallery. PREI and Ratkovich bought the building in 2005 from MassMutual Financial Group for $102.5 million, according to real estate data provider Real Capital Analytics. Ratkovich will continue to manage the property, which the groups renovated in 2008 for $34 million, according to the Monday announcement.
In the statement, Steve McCarthy, AXA IM’s US head of asset management, said the firm liked the core-plus opportunity.
“This type of acquisition, which involves a value-add component and partnering with a like-minded investor and operator, epitomizes our investment approach in the US,” McCarthy said. “It also fits with our plans to target dominant global cities and submarkets in the US and reflects AXA IM’s ongoing strategy of growing its platform and activity levels in the US.”
A new subway station slated for completion in 2023 will extend the Los Angeles metro to within 500 feet of the building. The trio of owners plan to target bringing in technology, advertising, media and technology tenants, according to the Monday statement.
“This transaction gives us the opportunity to retain control of an asset located in a submarket that is benefitting from significant public and private investment, while providing a unique opportunity to enhance the risk-adjusted returns for our investor,” said Kevin Smith, PREI’s head of Americas, in Monday’s announcement.
PREI had $63.7 billion in gross assets under management (AUM) as of December 31, 2015, according to the firm’s website. AXA IM – Real Assets had €64 billion of AUM as of November, with 38 percent of its portfolio invested in offices, according to its website.