Singapore-listed real estate developer and investor OUE has sold the famous Los Angeles landmark US Bank Tower for US$430m (€271m) – a discount to its last book value of US$650m.
OUE said it sold the 72-storey skyscraper to USBT Property Owner LP, without providing details of the buyer. In a market update last month, OUE said it was in talks with a possible institutional buyer for the building.
According to OUE, the price was arrived at after taking into account, among other things, the property’s market value and current US property market conditions amid the coronavirus pandemic.
OUE said the sale would enable the company to “streamline its asset ownership in a period when the longer-term outlook for the US property market may not be favourable”.
It added that, due to the COVID-19 outbreak, rental income from US Bank Tower had suffered as tenants either reduced their space or closed down.
“Unlocking capital from this divestment will enable the company to recycle its capital to pursue higher-growth reinvestment opportunities if and when such opportunities arise,” the company said.
OUE bought the asset in 2013 for US$367.5m, and reportedly spent US$100m on renovation. It came to market some 18 months ago.
Several US groups, the latest being New York-based Silverstein Properties, were reported to be among those interested in acquiring the building.
OUE initially offered the property to its listed OUE REIT, which had first right of refusal.
OUE REIT said in a separate statement today that it declined to exercise its right because the terms of the sale would not be accretive to its distribution per unit.