KBS REIT II’s $155 Million L.A. Office Sale Delayed Again

KBS Real Estate Investment Trust II Inc., a publicly registered non-traded real estate investment trust, announced last week that it has once again extended the sale of Union Bank Plaza, an iconic Los Angeles office tower, to an affiliate of Waterbridge Capital.

First announced on July 20, 2022, the KBS REIT agreed to sell Union Bank Plaza to the Waterbridge affiliate for $155 million, more than $50 million less than the $208 million paid to acquire the property from Hines’ US Office Value Added Fund in 2010. However, KBS has extended the closing date six times since then. The latest extension was to expire on Jan. 5, 2023, but no official closing announced has been issued as of publication time.

Union Bank Plaza is a 40‑story office building located in downtown Los Angeles, comprised of 701,888 rentable square feet on approximately 3.7 acres of land.

The company said if the sale closed by Jan. 5, 2023, then the sale price for Union Bank Plaza would be $155 million less a $15 million credit towards the purchase price, less other closing credits and adjustments.

KBS REIT II warned that there was no assurance that the company would complete the sale of Union Bank Plaza, but that if the Waterbridge affiliate failed to complete the acquisition, it would forfeit up to $10.5 million of earnest money under certain circumstances.

Prior to the purchase and sale agreement with Watrerbridge, Harbor Associates terminated its agreement to purchase the property for $165 million. In late 2017, RC Acquisition, an affiliate of Pacific Reach Properties, agreed to purchase Union Bank Plaza for $280 million, but later exercised its right to terminate the agreement.

KBS REIT II closed its primary offering in December 2010 after raising approximately $1.8 billion in investor equity.

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