Kilroy Realty Corp. has completed the acquisition of a 22-story, class-Abuilding in the heart of Hollywood.
Located at 6255 Sunset Boulevard, one block from the famous Sunset and Vine corner, Sunset Media Center sits in a location with access to a majority of the entertainment studios and users in the market. It boasts immediate adjacency to the Metro Rail Red transit line and numerous amenities. The office building is currently 87 percent leased, with in-place rents significantly below current market levels. KRC said it paid approximately $79 million for the, a significant discount to replacement cost, and plans an extensive renovation of the lobby, common areas and tenant spaces, which will include energy efficiency upgrades throughout the building.
The acquisition follows KRC’s strategy for seeking out and acquiring value-add properties that cater to the growing, media and entertainment sectors. With limited inventory and an older office stock, Hollywood continues to be an attractive sub-market for value-add opportunities.
“Sunset Media Center is located in the heart of an increasingly desirable ‘live, work, and play’ submarket,” said David Simon, KRC’s executive vice president for theregion. “We’ve acquired an opportunity to create meaningful long-term value in this property through well-targeted improvements to the building’s aesthetics, amenities and energy efficiency.”
As part of the transaction, the company assumed a secured mortgage loan of approximately $54 million that bears interest at a rate of 5.23 percent and matures on January 1, 2016, and issued approximately $5 million in common limited partnership units of Kilroy Realty L.P.