Kennedy-Wilson buys Angeles Corp. HQ, seeks bid on Santa Monica site.

Kennedy-Wilson Inc., the auctioneering firm that has expanded by finding opportunities amid distressed real estate markets, has purchased the headquarters of a severely distressed real estate operation -- Angeles Corp.

Kennedy-Wilson is expected to relocate from its leased offices in the Santa Monica Business Park to the 46,524-square-foot Angeles building at 10301 Pico Blvd. in Los Angeles near Century City.

Sources familiar with the deal said Kennedy-Wilson might move by year-end and sublease its current approximately 25,000-square-foot headquarters. They added that Fox Television's lease of the three-story Pico building's second floor runs for another two years.

The publicly held auction marketing firm paid about $3.8 million for its new headquarters, according to sources close to the deal. Title records indicate the new owner took out a new $2.7 million mortgage from Imperial Bank.

Kennedy-Wilson had previously been expected to move its headquarters to the 108,000-square-foot 520 Broadway office building in Santa Monica the firm purchased last fall for about $7.7 million. But it opted to seek bids on that property -- which has experienced substantial leasing activity since the Northridge earthquake -- through a recent "sealed bid" auction.

Sources have noted that prospective investors bid $10 million or more for the Broadway building, offering Kennedy-Wilson a substantial short-term profit opportunity. A sale of that property is thought to be near closing.

Technically, the seller of the Pico property -- where Angeles Corp. until recently maintained just a "skeleton" staff while under Chapter 11 bankruptcy protection -- is a partnership known as Angeles Partners XV.

Executives of Chicago-based Heller Financial Inc., the Fuji Bank  Ltd. subsidiary which funded a $12.5 million mortgage on the property in 1988, are said to have negotiated a "short pay" for a price below the mortgage's balance.

Kennedy-Wilson executives weren't available for comment, nor were the brokers representing the auction firm in the purchase, Dean Heck and Robert Gray of Beitler Commercial Realty Services.

Angeles, the troubled 30-year-old real estate investment management operation headed by Bill Elliot, filed for Chapter 11 bankruptcy protection in May 1993.