Aon Center owner may part with tower for right price.

TRANSWESTERN Investment Co. has hired brokers at Eastdil Realty to refinance its Aon Center, L.A.'s second-tallest building.

Or has it?

While Eastdil has been diligently lining up banks, it let it be known that the 1-million-square foot tower can be purchased for $220 a foot, or an overall price of $220 million.

That's a $100 million appreciation from when Transwestern bought the 62-story tower from Wells Fargo & Co. in late 2003 for $120 a foot, but not out of line for what downtown trophy office buildings have been selling for recently.

An Eastdil executive maintained that the brokerage has been retained by Transwestern to line up financing, but added that the Aon Center, like almost every other building these days, could be had for the right price.

"Anything stuck in the ground that can be defined as real estate is probably for sale these days," the executive said, "but they engaged us to look for financing."

Nearby on Bunker Hill, 777 Tower at 777 S. Figueroa St. and Bank of America Plaza at 333 S. Hope. St. each changed hands for well north of $350 a foot within the past six months, but 777 Tower was part of a larger portfolio sold to Maguire Properties Inc. and the BofA building had long-term commitments for most of its space.

Aon Center's vacancy levels and asking rents, meanwhile, have continued to lag the general downtown market, according to Mark Sullivan, a Studley executive vice president.

In addition, the 200,000 square feet occupied by the building's anchor tenant, insurer Aon Corp., is up for renewal in the next couple of years. Brokers say the company hasn't made a commitment to stay and has signaled it may even cut the amount of space it uses.

"My guess is (Transwestern) is testing the market to see if anyone is very hungry for this asset," Sullivan said. "If Aon were to leave or downsize, they would be better to sell now before the company can make any kind of public announcement."

Skyrocketing downtown property values have increased Aon Center's worth since Transwestern purchased the property, and the company is looking to capitalize on that by likely taking out an intermediate floating rate loan, the Eastdil source said.

While the short-term loan would expose Transwestern to more interest-rate risk, it also gives the company greater flexibility, the executive said.

When Eastdil was retained it sparked rumors of a pending sale because Eastdil, a wholly owned subsidiary of Wells Fargo, was the firm that brokered the Aon Center's sale to Transwestern.

Staying On

Law firm Sonnenschein Nath & Rosenthal LLP has inked a 12-year lease worth $31 million at current market rates in the former Sanwa Bank Plaza, now called Figueroa at Wilshire.

The firm will move its offices, which currently account for 64,000 square feet, into the larger expanse of space on the building's upper floors. Chicago-based Sonnenschein Nath & Rosenthal is one of the building's original tenants.

Sonnenschein opened the office in 1992 with 20 lawyers and today the firm's Los Angeles office has grown to 70 attorneys.

The lease is a boon for the building's owner, Hines, which along with Mitsui Fudosan developed the 1 million-square-foot property, with its distinctive octagonal glass crown.

Sonnenschein will be occupying space abandoned when law firm Buchalter Nemer Fields & Younger LLP left last year for the 1000 Wilshire building.

The 52-story Figueroa at Wilshire, located at 601 S. Figueroa St., remains slightly above the average downtown vacancy of 15 percent.

Cushman & Wakefield Inc.'s Tom McDonald negotiated the lease for the tenant, along with Sonnenschein partners Jay Shafran and Robert M. Johnson. Hines was represented internally.

Flying Away

Pacifica Cos. has put the 594-room Radisson Hotel Los Angeles Airport on the market, according to sources familiar with the listing.

The hotel, which is being marketed by Plasencia Group, sits at the end of Century Boulevard and the entrance to Los Angeles International Airport.

Nearby hotels have sold for about $100,000 a room, which would place the hotel's value close to $60 million. A final price could be even higher because the hotel has entitlements for an expansion.

Meanwhile, the hotel market near the airport has improved as air travel returns to pre-9/11 levels.

In January, the average daily room rate for hotels adjacent to the airport was $79.89 a night, an 8.6 percent increase from the year before, according to PKF Consulting.

When the company bought the Radisson in 2001, it unsuccessfully tried to break the hotel union Unite HERE by firing all the employees. In 2003 the company was criticized by LAX officials, the Federal Aviation Administration and neighborhood groups on proposed expansion plans to build a 10-story addition to the hotel and a six-story parking garage. Those plans were ultimately approved, though work hasn't begun.

Real Estate Alert first reported that the hotel had been put up for sale.

Done Deal

Beverly Hills-based Canyon Capital Advisors and basketball star Earvin "Magic" Johnson's Johnson Development Corp. announced the closing of the first $470 million of their newly launched, $600-million second fund called Canyon-Johnson Urban Fund II.

Like the original fund, the new investment vehicle's roughly $3-billion leveraged buying power will be focused on acquiring, repositioning and developing real estate in urban communities throughout the country. Word of the fund was first reported late last year by Real Estate Alert.

Staff reporter Andy Fixmer can be reached by phone at [phone], ext. 263, or by e-mail at [e-mail].