Ex-Google CEO Buys LA Mansion

Introduction to LA’s Luxury Real Estate Market

Ex-Google chief executive Eric Schmidt and his wife Wendy Schmidt purchased Spelling Manor, a sprawling estate at 594 South Mapleton Drive built for television producer Aaron Spelling in the 1990s, for $110 million.

The sale is a tie for the priciest deal of the year, on par with a $110 million Bel Air mansion sale at 630 Nimes Road in May. 

Spelling Manor traded hands for almost $120 million six years ago (when an heiress sold it) and was placed on the market in 2022 for $165 million. The megamansion has gone on and off the market since, and was last listed for $137.5 million, giving Schmidt a 20 percent discount.

The French chateau-style property holds 14 beds and 27 baths. The Manor, as it is called, spans more than 56,000 square feet on 4.7 acres. It has a beauty salon, bowling alley and a screening room.

Tishman Cashing In

Tishman Speyer is selling an office building in Beverly Hills for more than $200 million — the last in a portfolio of three adjacent commercial properties.

The buyer of the three-story, nearly 300,000-square-foot office building at 345 North Maple Drive called Maple Plaza wasn’t immediately clear. The reportedly half-empty, Class A property is home to production teams for “The Lincoln Lawyer” and “Crazy Rich Asians,” and has goop Kitchen and Cafe Ruisseau as retail tenants. Tishman Speyer purchased Maple Plaza in 2005 for $101 million. 

The New York City-based real estate company purchased the two other two adjacent office properties then, too, at 9242 Beverly Boulevard and 407 North Maple Drive, and sold them both last year. Fashion Nova founder Richard Saghian bought the latter for $118 million in an off-market deal and made it the brand’s headquarters. Months later Jason Illoulian and fashion and hospitality entrepreneur Frank Zarabi snagged the former for $90 million. 

Tishman Speyer took out a $220 million loan connected to the trio of properties two years after purchasing them. The debt was placed on a special servicing watchlist, but the company secured a $275 million refinancing ahead of its maturity date.

Beverly Hills offices have a 24.6 percent vacancy rate but are still trading hands. Last quarter, the fifth-priciest office sale in West Los Angeles was Law Brothers’ purchase at 8350 Wilshire Boulevard in Beverly Hills for $26 million.

Kilroy Sells 65% Occupied Office Building

Kilroy Realty sold a Santa Monica office building to Washington Capital Management for $40 million, the company announced in its latest earnings release. Washington Capital Management claimed the purchase was on behalf of a client. 

Kilroy purchased the seven-story, 73,000-square-foot property at 501 Santa Monica Boulevard for more than $16 million in 1998. 

The Santa Monica office building was only 65 percent occupied, according to the company’s first-quarter financial results. Occupancy had been on the decline since the pandemic, quarterly statements show: consider, the building was 97.8 percent occupied in the first quarter of 2020. 

Nonetheless, Kilroy reported an increase in income to $68.4 million for the second quarter of the year from $49.2 million a year earlier. Funds from operations increased, too, to $135.9 million compared to $132.6 million during the same period. 

“We are pleased to report on a strong quarter of execution across every facet of our business,” Kilroy CEO Angela Aman said in the second-quarter earnings release.

“We were active on the capital recycling front, with significant progress recently made on both the monetization of land in our future development pipeline and on dispositions of non-strategic operating properties, as institutional interest in West Coast office assets continues to improve,” Aman said.

Apartments, Please

Concord Capital Partners paid two sellers $79 million in separate deals for five residential buildings throughout Los Angeles, all constructed in the 1920s.

The deals include three buildings in Koreatown and one building each in Hollywood and Lakewood, totaling more than 500 apartments. Sellers included the Seligman Group for four of the buildings and Midwood Investment & Development for one.

“Los Angeles is one of the most difficult cities in which to build scale, given the relatively small size of most buildings,” Concord CIO Jonathan Fhima said in a statement. “We’ve successfully assembled 537 units with significant value-add potential across five of L.A.’s most historically significant properties — buildings that have housed icons such as Marilyn Monroe, multiple U.S. presidents and other high-profile figures.” 

Concord used a $60.5 million senior loan and $30 million in equity.

“We were attracted to these properties because of their favorable pricing relative to historical sales, replacement costs, and what we view as the intrinsic value of the assets,” Concord chief executive Reuben Robin said. “The properties have seen strong Class A renter demographics across nearly a full century of market cycles.” 

Another Jamison Office-to-Residential Play

Jamison is planning to turn a 20-story office building in Koreatown into 495 apartments. The property at 3550 Wilshire Boulevard will be called the “Walker.” 

Plans include renovating the existing ground floor and adding a rooftop amenity deck with pool and barbecue, and penthouse mezzanines. Ground-floor tenants such as Coffee Bean & Tea Leaf will remain.

Jamison has been busy on Wilshire. In November, the company began a similar adaptive reuse project at 3325 Wilshire Boulevard, across the street from the company’s headquarters. Plus, it is working on a ground-up high-rise complex at 3600 Wilshire; and two years ago, Jamison filed plans to convert a 17-story office tower at 6380 Wilshire into 210 apartments. 

Los Angeles’ housing goals include almost 457,000 new units by the end of the decade and office-to-residential conversions such as Jamison’s can help the effort.

OC Office Campus Meets Buyer

ParkTerra and Jen Partners bought an office complex called the Axis in Anaheim for $62.5 million.

The complex spans more than 300,000 square feet across three properties. It was sold by a joint venture between Pendulum Property Partners and an unnamed global banking giant.

Axis, located in the Platinum Triangle district and in close proximity to Angel Stadium, the Honda Center and Disneyland, comprises a creative office building made for owner-user tenants; a residential redevelopment site; and another office building.

“The Axis portfolio generated strong interest from a broad spectrum of investors, developers and owner-users,” CBRE’s Anthony DeLorenzo, who helped broker the deal, said in a statement. “This transaction reflects the continued momentum in the Anaheim market, where quality assets like Axis stand out… The seller ultimately selected a capable cash buyer who performed as promised, reinforcing the strength of the offering and execution.”

Orange County’s office vacancy rate was unchanged at 19 percent  in the second quarter compared to a year earlier.

Conclusion

The recent real estate transactions in Los Angeles, including the purchase of Spelling Manor by Ex-Google CEO Eric Schmidt and the sale of an office building in Beverly Hills by Tishman Speyer, demonstrate the ongoing demand for luxury properties in the area. The market is also seeing a trend of office-to-residential conversions, with companies like Jamison and Kilroy Realty adapting their properties to meet the growing need for housing. As the city continues to evolve, it will be interesting to see how these transactions shape the future of LA’s real estate market.

FAQs

Former Google CEO acquires Spelling Manor for $110M

Tishman Speyer selling $200M-plus Beverly Hills office building

Concord Capital grabs five historic apartment buildings across LA for nearly $80M