One of decade's biggest deals may be brewing in Century City.

Setting the stage for what could become the biggest real estate investment the Southland has seen in nearly a decade, the institutional owners of Century City's signature Century Plaza Towers have engaged an advisor to pursue a possible sale of the property.

No asking price has been disclosed, but real estate sources said the price for the complex real estate asset could conceivably reach the $500-million mark. That would represent by far the most paid for a Southland property since Japan's Shuwa Investment Corp. spent more than $600 million in 1986 for downtown L.A.'s twin Arco Plaza highrise complex.

The decision to seek a buyer seems to reflect the improving commercial real estate economy on L.A.'s Westside - as well as the burgeoning real estate "disposition" tendencies of a major domestic life insurance company and Japanese financial institutions.

A partnership known as Delta Towers Joint Venture - which includes Prudential Insurance Co. of America and a consortium headed by Citicorp's real estate lending affiliate - has asked Eastdil Realty Inc. to pursue the potential sale of the partnership's assets.

Delta Tower's assets - which sit on one massive contiguous plot comprising the heart of Century City - include the 2.25 million-square-foot twin triangular 44-story "theme" towers; one of the world's biggest parking garages, with some 6,000 subterranean stalls; and the land below the adjacent ABC Entertainment Center complex.

Half-owner Prudential's Premisys Real Estate Services property management/leasing affiliate has been aggressively renovating the high-rise towers and leasing up vacant space there over the last three years, amid the Westside's commercial real estate slump. The landmark twin towers at 2029 and 2049 Century Park East are now about 88 percent leased, up from 73 percent when Premisys took over.

Long leases

Delta Towers has granted a leasehold on the 580,000-square-foot ABC Entertainment Center property at 2020 and 2040 Avenue of the Stars and the underlying land to another party through at least 2002. The center is home to Capital Cities/ABC Inc.'s West Coast headquarters, the Shubert Theater and multi-screen Cineplex Odeon movie house.

The agreement between lessee and lessor holds that if Delta Towers opts to demolish or substantially change the use of the entertainment center, the lease would expire in 2002. Otherwise, it runs through 2019.

However, Delta or its successor will retain an option to change or demolish the property and terminate the lease by informing the lessee of such plans once each year after 2002 - the year Cap Cities/ABC's commitment to rent most of the entertainment center's office space expires.

The entertainment center's future tenancy and use "is the key variable" prospective investors must consider, one source familiar with Delta Towers' assets acknowledged.

Considering the entertainment center's recent financial history, prospects for a substantial redevelopment project seem ripe, several real estate sources noted.

The leasehold on the center is now held by a consortium made up primarily of U.S. subsidiaries of Japanese leasing companies. The consortium had funded a $50 million mortgage secured by the leasehold interest.

An investment group headed by real estate entrepreneurs Juri Ripinsky and Malcolm Kingston assumed the mortgage when their group purchased the leasehold for a reported $55 million in 1990. The Ripinsky-Kingston group defaulted on the mortgage and ended up relinquishing control to the lenders through a 1993 bankruptcy reorganization.

The lender consortium now operates as Century Entertainment Center L.P., with Equitable Real Estate Investment Management in charge of managing the group's assets.

Buyout possible

Sources noted that the Delta Towers partners and Century Entertainment's representatives have undoubtedly discussed a potential "buyout" under which Delta would assume full control of the ABC Entertainment Center - perhaps helping facilitate a sale of the entire complex. The property could use a substantial renovation, perhaps with a new emphasis on retail and entertainment uses, sources added.

But those negotiations have obviously not borne fruit, and Delta Towers is now pursuing a sale with the leasehold continuing.

Cap Cities/ABC's tenancy, the live and screened theaters and the retail facilities - along with the perceived need for a revitalization - have also fueled substantial speculation that Walt Disney Co., which has agreed to buy Cap Cities/ABC, would be a logical buyer of Delta Towers' and/or Century Entertainment's assets.

Like the leasing companies' interests in the ABC Entertainment Center, the Citicorp-led group assumed its interest in Delta Towers after a major real estate investment partnership failed to meet its debt-service obligations.

Citicorp and other members of the group - including four big Japanese banking firms and some smaller ones - loaned hundreds of millions of dollars in the mid-1980s to a JMB Realty Corp.-led group that bought Aluminum Co. of America's 50-percent interest in Delta Towers and other real estate in Century City and around the United States.

After three years of negotiations amid the depressed real estate environment here and elsewhere, the JMB group relinquished its interest in Delta Towers to the Citicorp lender group last year. Prudential was Alcoa's development partner as the twin towers rose in the mid-1970s adjacent to the ABC Entertainment Center.

Banking regulators in Japan have recently encouraged institutions there to dispose of troubled real estate assets - probably a key factor in the decision to sell Delta Towers' assets.

Further, Prudential's new brain trust is mandating a significant sell-off of Prudential Realty Group's "general account" equity interests in major properties across the United States - with particular emphasis on the Western region. Knowledgeable sources indicated that the realty group's regional operation - based at the twin towers - has been targeted to be substantially downsized, with some key executives departing within the next year.

While Eastdil declined to comment, sources said Century City-based executives Roy Hilton March and Jeffrey Weber are the point men on the assignment. A Prudential spokesman confirmed that Delta Towers' owners "have asked Eastdil to advise us on the possible sale of the property."

One thing is clear: The assets will generate keen interest from major real estate investors and financiers, several sources agreed.

Due to the huge price tag the assets will carry, pension advisory operations and real estate investment funds managed by big Wall Street players will be particularly interested in Delta Towers, noted Steve Roth, president of real estate investment banking firm Secured Capital Corp. in West L.A.

Roth and others suggested that all parties that had serious interest in buying into New York's Rockefeller Center - including Disney - would likely also consider purchasing one of the West Coast's highest-profile properties.