Cornerstone Plaza sale shows strength of Westside market.

DESPITE losing tenants to Hollywood and downtown Los Angeles, the Westside market remains strong--at least by the measure of a recent building sale.

South Bundy Office Co. LLC, an investment vehicle controlled by an undisclosed pension fund, paid $66 million for Cornerstone Plaza, an eight-story, 165,000-square-foot office building at 1990 S. Bundy Drive. The deal breaks down to $400 per square foot.

"$400 is a big number and we had over 15 offers within 10 percent of that," said Peter Best of Jones Lang LaSalle Inc., who represented seller Realty Center Management Inc.

Erick Paulson, of LaSalle Investment Management, who represented the buyer, said the pension fund had been looking in the West Los Angeles market because there is "a lot of potential for rent growth" there.

"Vacancy in the market is less than 10 percent and with high construction costs we think the market will cycle through some rent growth," Paulson said.

Best said that the building could see rent spikes in the 20 percent range. The new owner will do some minor renovations to the building's lobby, said Chris Houge of Madison Partners, who also represented the seller.

Though the price was high, Houge said that the Westside will soon see sales with even higher price per-square-foot figures because of a lack of new or available product. "There is nothing significant under construction or planned on the Westside unless you go to the Playa Vista area," he said.

Houge projects that in the near future buildings on the Westside could trade for around $550 per square foot.

Tenants at the building include Nadel Architects and television station KSCI.

Realty Center Management also was represented by Jay Borzi, Kevin Crummy and Stephen Somer of Eastdil Secured LLC, and Rick Buckley of Madison Partners.

Staff reporter Daniel Miller can be reached at [phone], ext. 263, or [e-mail].