Real estate investment and services firm Kennedy Wilson and its equity partners have purchased a 126,000 square-foot office building in Woodland Hills for about $19 million, the company said Tuesday.
The sale of Warner Atrium at 6400 Canoga Ave. represents the last deal to close in an office portfolio acquisition comprising five Los Angeles-area properties, which the firm announced in June. Combined, the portfolio is worth $143.5 million, Beverly Hills-based Kennedy Wilson said.
Los Angeles-based Jamison Services Inc. was the seller in all deals, which included the sale of a nearly 180,000 square-foot building along Ventura Boulevard in Encino, which was announced in October.
“We thought it was a great opportunity to reposition assets in some of the stronger office markets in L.A. County,” said John Prabhu, president of KW Commercial Investment Group, referring to the five recent deals.
The Warner Atrium sale closed Monday and was valued at a little more than $19 million, Prabhu said.
Kennedy Wilson sees Warner Atrium as a “low cost alternative” to nearby upscale, high rise office buildings and is attractive given its location in Warner Center, which provides easy access to numerous amenities, Prabhu said.
To spruce up the building, which was built in the early 1980s and is about 70 percent leased, Prabhu said Kennedy Wilson will upgrade common areas, landscaping and more. Rents at the building will rise about 5 percent to 10 percent from about $1.80 per square foot after the tenant improvements are completed around mid-2012, Prabhu said.
Jamison Services could not be reached for comment.
Jared Smits, a vice president with NAI Capital Inc. who specializes in office transactions, said the deal is a good sign in a still-struggling office market.
“Three years ago there were zero of these” institutional deals, said Smits, who was not involved in the transaction.
Current tenants at Warner Atrium include the law firm Lenske, Lenske & Abramson, EEG Institute and MedPoint Management Inc.
Kennedy Wilson owns 37 percent of the five-property portfolio, the firm said. The remaining ownership stake resides with Kennedy Wilson Real Estate Fund IV, Fairfax Financial Holdings Limited and The LeFrak Organization.
Prabhu said Kennedy Wilson will likely hold onto the five buildings for three to five years before putting them back on the market.