Pacific Design Center

Transaction Overview
Property Type: Office
Transaction: Property acquisition / disposition

Transaction Background
Pacific Design Center ("PDC"), a 1.4 million-square-foot design showroom and office complex including two main buildings located on fashionable Melrose Avenue in West Hollywood, CA. Designed by world-renowned architect Cesar Pelli, PDC offers tenants a preeminent location and creative work environment in two architecturally distinct buildings known as Pacific Green and Center Blue. TIAA held a $205 million first and second mortgage on the property. After years of protracted workout negotiations with the former owner, TIAA was determined to sell PDC, but was thwarted as a result of the dislocation in real estate and global capital markets in 1998.

Transaction Summary
In early 1999, TIAA contacted CBA and after several months of negotiations, agreed to sell the property for a significantly reduced price. CBA, through its affiliate, Cheslock Bakker Opportunity Fund, L.P. (CBOF), formed a partnership with Cohen Brothers Realty to purchase the property. Cohen Brothers Realty is also the owner and operator of the successful Design & Decoration building in Manhattan. The investment represented an excellent opportunity to create value with the right combination of strategic asset re-positioning, capital investment and property management expertise. Renovations of Center Blue have been completed and new leases were executed at substantially higher rents. The renovation of Pacific Green has resulted in a unique offering of approximately 200,000 sf of class A office space in the sub-market of the western Los Angeles metropolitan area. In September 2003, CBOF sold its interest to Cohen Brothers Realty.