Starwood Turns Over 1.6M SF El Segundo Office Campus To Lenders
Starwood Capital and Artisan Ventures offloaded a 1.6M SF office campus in El Segundo.
Beacon Capital Partners’ Fund 9, along with Arizona-based 3Edgewood Real Estate, acquired a majority of the existing debt on a property called PCT at 100, 200 and 222 N. Pacific Coast Highway. The Real Deal first reported the change in ownership.
A deed-in-lieu-of-foreclosure was completed Aug. 26, after which the debt was converted to equity, according to a person with knowledge of the transaction.
There was a $484.8M balance on the senior loan and an undisclosed amount of mezzanine debt on the property as well.
The exact price that Beacon and 3Edgewood paid is unclear, but the property was acquired at “a significant discount to the loan balance,” the source told Bisnow.
Starwood and Artisan bought the PCT in 2017 for just over $611M.
In 2019, a joint venture of Starwood Capital and Artisan Realty refinanced the property with a senior mortgage from Morgan Stanley for about $500M. The details of the total debt package remain unclear, but Starwood was seeking five years of interest-only financing totaling $624.25M at the time.
In 2023, PCT ownership was reportedly in talks with Morgan Stanley about the loan, as the value of the building had changed dramatically in the years since the loan was issued.
The new owners of PCT plan to undertake a significant repositioning of the property, the source said.
3Edgewood is an Arizona-based real estate investment firm led by Robert Sarver, the former owner of the Phoenix Suns NBA team, that has been targeting office assets in a turbulent time for the asset class.
Last year, 3Edgewood purchased a 2.2M SF mixed-use campus with office space in the Dallas area for $580M. In another major transaction, it teamed up with Parkway to buy almost 3M SF of office across seven buildings in two Houston campuses, CoStar reported.
