Buchanan Street Partners and The KOR Group have sold a mid-rise apartment building in downtown Los Angeles to Equity Residential for $100 million. Based on the property’s 322 luxury units, the acquisition price works out to roughly $310,000 per unit, which is among one of the higher prices paid in the market, according to Real Capital Analytics.
“It's a fantastic asset and a fabulous building,” said one source from Equity Residential on why the Chicago-based multifamily REIT purchased the property. “We love the property and love the location.”
Originally built in 1949 as a 425,000-square-foot office building, the 13-story property at 612 South Flower Street, known as Pegasus, was redeveloped as a condominium project in 2003 by the prior owners, KOR and Lubert-Adler Real Estate. Through a joint venture with the California Public Employees Retirement System, Buchanan bought out Lubert-Adler’s stake and invested $21.6 million jointly with KOR to recapitalize and reposition the building in 2008.
In late 2010, Buchanan received significant unsolicited interest to sell the asset and subsequently decided to list it for sale. In January, the Newport Beach, California-based real estate investment manager hired Cushman & Wakefield to broker the sale of Pegasus, which was closed in April.
Pegasus, whose amenities include a rooftop pool and sundeck, a fitness center and a business center, also comprises 12,500 square feet of retail space. That space is leased to Daily Grill and Café Primo, both of whom have remained on-board since the sale.