Ivanhoé buys PacMutual property for $200m

The acquisition of the historic office complex represents the Canadian pension plan’s first deal in Los Angeles with Callahan Capital Properties.

Ivanhoé Cambridge and its partner, Chicago-based private equity real estate firm Callahan Capital Properties, have acquired a 100 percent interest in the PacMutual office property, located at 523 West 6th Street in downtown Los Angeles, for approximately $200 million. The seller was undisclosed, but was identified as Los Angeles-based real estate developer Rising Realty Partners in media reports.

According to data provider Real Capital Analytics, Rising Realty, in partnership with Mount Kellett Capital Management, originally purchased the three-building office complex in January 2012 for $60 million. The joint venture subsequently made extensive upgrades on the property and significantly increased tenant occupancy.

PacMutual totals 464,000 feet, comprising three buildings that the Pacific Mutual Life Insurance Company built between 1908 and 1926. The property is located in Los Angeles’ financial district, in close proximity to the 7th Street retail corridor, L.A. LIVE entertainment complex, STAPLES Center arena, Broadway Theater District, South Park residential neighbourhoods, and mixed-use developments such as The Bloc and Wilshire Grand.

“Downtown Los Angeles has seen a remarkable renewal and truly represents a modern ‘live-work-play’ sector of the city,” said Arthur Lloyd, executive vice president of office for North America at Ivanhoé Cambridge. “PacMutual’s location, quality and appeal for the creative economy align remarkably with our long-term investment strategy in key cities in the United States.”

Tim Callahan, Callahan’s chief executive officer, added: “PacMutual represents not only a compelling investment in the form of very high-quality real estate in an increasingly prime location, but also represents the first Ivanhoé Cambridge/Callahan Capital Properties acquisition in Los Angeles to date. As an important strategic market, we hope to further expand our presence in LA over time.”

Ivanhoé Cambridge, which is the real estate investment subsidiary of Canadian pension plan Caisse de dépôt et placement du Québec, first formed its joint venture with Callahan in late 2012, as it sought to build out its US office real estate portfolio. In July, the partners announced the acquisition of four office assets in Denver, Boston, Chicago and New York from Beacon Capital Partners for more than $225 million.