New Equity Partner for Downtown’s Pac Mutual BuildingMonday, April 28, 2014
Downtown L.A. real estate company Rising Realty Partners announced today that its equity partner in the historic Pac Mutual building, New York investment firm Mount Kellett Capital Management, had sold its stake to Houston pension fund advisor Lionstone Group for an undisclosed price.
Rising and Mount Kellett originally acquired the historic, 106-year-old property at 523 W. Sixth St. two years ago for $60 million. Since then, the partners have invested more than $25 million to restore and reposition the campus of three interconnected Class A office buildings in downtown.
Christopher Rising, president and chief operating officer of Rising Realty, said the timing was right to recapitalize the renovated building, which is now about 90 percent leased.
“Now that we’ve gotten the project stabilized and thriving, we thought it was a good opportunity to allow our current partner to take some money off the table and bring in money that will have a long-term vision,” he said.
Nelson Rising, chairman and chief executive of Rising Realty, said the transaction was his second with Lionstone. In 2009, as head of MPG Office Trust Inc., he sold the Lantana Entertainment Media Campus in Santa Monica to Lionstone.
“This partnership brings institutional, long-term ownership and enhanced capital to support the continuing improvement of Pac Mutual,” he said in a statement.
In February, the Pac Mutual building was the oldest and only historic building in Los Angeles to be designated a Leader in Energy and Environmental Design at the platinum level by the U.S. Green Building Council.
Rising Realty will continue to operate and manage the building, and brokers Jim Jacobsen and Scott Rigsby of Industry Partners, who advised Lionstone on the transaction, will continue to handle leasing.