601W Acquires 1.4M-SF DTLA Office Tower at Steep Discount

Northwind Group, a Manhattan-based real estate private equity firm and debt fund manager, originated a $132-million first-mortgage acquisition loan secured by 333 S. Grand Ave., a 55-story, Class A office tower totaling over 1.4 million rentable square feet in the Bunker Hill submarket of Downtown Los Angeles. The loan funds the acquisition of the property, known as Wells Fargo Center North, and will provide an additional $48 million “good news” facility for future leasing costs. The buyer is 601W Companies, which is acquiring the property out of foreclosure, according to published reports.

The transaction marks Northwind’s first LA transaction and its fifth loan to 601W, following a first-mortgage loan earlier this year for the acquisition of 175 W. Jackson Blvd. in Chicago. Like 175 W. Jackson, 333 S. Grand was acquired at a pronounced discount to historical levels, reflecting a broader repricing of Downtown Los Angeles office assets over the past several years, Northwind said.

“Older buildings held by owners with elevated cost bases are constrained in their ability to offer the tenant improvement and leasing commission packages the market requires,” said Ran Eliasaf, Northwind founder and managing partner. “Our borrower enters the market without that constraint, and with $50 million of dedicated leasing capital, they are well-positioned to compete for new tenants and build on the strong foundation already in place.”

The acquisition was arranged by Rael Gervis at Meridian Capital Group. Northwind was represented by John Vavas of Polsinelli Law Firm.