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May 5, 2005
NEW
ORLEANS
— As expected, Los Angeles-based Hertz Investment Group has purchased the
36-story LL&E Tower in downtown New Orleans from a national real estate
investment trust for $45 million. Parties to the deal confirm it closed
yesterday.
In recent months the building’s former owner, Chicago-based Equity Office
Properties Trust, has sold a number of properties in cities it considers
outside of its “core” markets. Equity first announced last fall that it
expected to sell more than $2 billion in holdings over five years.
In addition to LL&E Tower, the company owns two other office complexes in
the local area: Texaco Center on Poydras Street in New Orleans and the
three-building Lakeway Center on Causeway Boulevard in Metairie.
Real estate sources say Equity also is looking to sell Lakeway Center. The
company has reportedly presented a sale proposal on the 1
million-square-foot complex to at least one owner of local office buildings.
There’s no word on whether the company is trying to dispose of the Texaco
Center building as well. Officials with Equity do not comment on pending
transactions or confirm that they are pending.
With nearly 550,000 square feet of rentable space, LL&E Tower is one of the
largest Class A office buildings in the metropolitan area. After a lease
with the building’s namesake firm, Louisiana Land & Exploration, expired at
the end of last year, occupancy fell considerably, said Gary Horwitz, chief
operating officer for Hertz Investment Group.
Equity reported today that the building is 70 percent occupied.
“We think this is arguably one of the best Class A buildings in the city,”
Horwitz said. Hertz Investment’s plan is to aggressively lease the building
and get it back up to around 90 percent occupied. “We think there’s going to
be demand at this building that will take it back up to a stabilized
occupancy level within 18 months,” he said.
Horwitz said the building’s mix of reliable tenants and its prime position
in the middle of the Central Business District made it an attractive
purchase for the company.
Real estate mogul Judah Hertz began acquiring local properties in 2003. He
currently owns the 26-floor Dominion Tower and the adjacent New Orleans
Centre shopping mall, as well as the 27-story Poydras Center. This latest
acquisition makes him one of largest office property owners in the area.
Horwitz said Hertz may not be done purchasing buildings in the area. “We are
always looking at additional acquisitions that make sense,” he said. “We
like New Orleans, and we feel bullish about it.”
By A.J. Mistretta
The Biz Network
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