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Wereldhave nets $110 million loss on First Allied Plaza, DiamondView sales

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Dutch firm Wereldhave appears to have lost more than $110 million in six months on two San Diego high rises.

The 376,703-square-foot First Allied Plaza building at 655 W. Broadway has been sold for a reported $140.88 million -- representing a more than $70 million drop from the $212 million figure garnered when the asset was sold in 2007.

Wereldhave sold the 305,255-square-foot DiamondView Tower office and retail complex for $121 million to a joint venture of Cruzan|Monroe and Cigna in October 2012.

That price was also less than what Wereldhave paid for the property. The Dutch firm paid $161 million for that asset in September 2008.

The much lower price there runs counter to DiamondView's nearly 100-percent occupancy.

The First Allied sale is part of a 31-property, $720 million transaction in which Wereldhave has sold the remainder of its U.S. portfolio to a unit of Dallas-based Lone Star Funds. Lone Star is a worldwide private equity firm.

Wereldhave was represented by Eastdil Secured, which declined comment for this story. Lone Star, which represented itself, couldn’t be reached by press time.

The 376,703-square-foot First Allied Plaza building at 655 W. Broadway has been sold for a reported $140.88 million — representing a more than $70 million drop from the $212 million figure garnered when the asset was sold in 2007. Photo courtesy of CoStar

Lone Star, which is actually best known for its acquisition of distressed assets (First Allied Plaza is a much healthier specimen) has organized 10 private equity funds with aggregate capital commitments totaling more than $33 billion since the establishment of the company’s first fund in 1995.

Wereldhave said last year it was selling its U.S. portfolio to better focus on its European assets — a decision that has proven to be costly.

“Timing is everything," said Kraig Kristofferson, a CBRE senior vice president.

Kristofferson, who wasn’t associated with the deal, said he couldn’t speak for Wereldhave, but said with all of Europe’s monetary turmoil, the Dutch firm must have felt it was necessary to pull in its horns. The company could not be reached for comment Thursday.

The 23-story First Allied Plaza Building, also known as Advanced Equities Plaza and Broadway 655, was completed by Lankford & Associates in late 2005. That San Diego-based firm was the developer of such varied properties as the Hall of Justice, Smart Corner and the Scripps Northridge office complex overlooking Sabre Springs.

First Allied Plaza is a Class A, 86.7-percent-leased office building with a fitness center, large floor plates capable of accommodating single large or multiple smaller tenants, a total of 16,000 square feet of retail including a Bruegger’s Bagels, a restaurant with Japanese to Italian themes, on-site property management and 24-hour security. The building is Energy Star Certified and has 700 parking stalls. About a dozen condominium units in about 16,000 square feet are also part of the property.

Matthew Carlson, a Cushman & Wakefield senior director who has been marketing the property for lease said “it’s the only newest generation office building that’s in the core.”

Carlson has been working in conjunction with J.P. Huntington, a Cushman & Wakefield senior associate.

Carlson, who said there are two pending lease transactions that would take the bulk of the remaining space at First Allied, added that the building has very efficient floor plates.

“It’s a very easy building to market,” Carlson said.

A flier for prospective tenants says the largest remaining divisible space is 16,321 square feet on the sixth floor. The flier said there were no other spaces larger than 6,507 square feet.

The CoStar Group reported, and Carlson confirmed, First Allied's tenants include the law firm of Robbins Geller Rudman & Dowd LLP, which has 300 employees in 117,000 square feet; First Allied Securities Inc., with 75 employees in 39,536 square feet; and Deloitte Development (a unit of the accounting firm), with 60 employees in 28,427 square feet.


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