Apr
23

Chicago Real Estate Firm Goes West to Invest

April 23, 2011

A Chicago real estate investment trust has bought some L.A. housing.

Equity Residential, led by real estate mogul Sam Zell, has purchased a 13-story apartment building in Los Angeles for $100 million.

The deal marks one of the largest multifamily sales ever in the central business district of the downtown Los Angeles area.

The building, located at 612 S. Flower Street at Wilshire Boulevard, was designed by renowned architect Welton Becket and opened in 1949 as the General Petroleum Building. It later became the Mobil Oil headquarters; the building’s name was derived from Mobil’s logo of the winged red horse, Pegasus.

The property was left vacant for 12 years before it was purchased by the Kor Group in 2001 and converted into a 322-unit apartment building in 2003.

It was one of the first buildings to take advantage of an ordinance that encouraged the reuse of property, which led to the conversion of thousands of office and industrial properties into housing units.

The Kor Group formed a partnership in 2008 with Buchanan Street Partners to fix up the place before putting it on the market.

At that $100 million selling price, Equity Residential has purchased the luxury apartment building for approximately $310,000 per unit.

“For Equity Residential to deploy such significant capital is a tremendous endorsement of downtown Los Angeles,” said Marc Renard, executive managing director with Cushman & Wakefield, the brokerage firm that negotiated the deal.

In addition to its residential units, the 12,500-square-foot ground floor of the Pegasus building includes a restaurant, bar and coffee bistro.

The pet-friendly property also offers a heated rooftop pool and sundeck, fitness center and business center.

The apartments feature 9-foot ceilings and in-unit laundry facilities. Rents average about $1,800 a month.

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