Wayne Ratkovich, The Bloc (Credit: The Ratkovich Company/Youtube & The Ratkovich Co.)
National Real Estate Advisors, now majority owner of the Bloc, has issued a “request for proposals” for a new firm to manage the mega mixed-use complex in Downtown Los Angeles, The Real Deal has learned.
Development firm Lincoln Property Co. and the asset management arms of commercial brokerages JLL and CBRE are pursuing the offer, sources said.
In a joint statement released Monday, National announced it would be buying out its partner, the Ratkovich Co., for the 1.8 million-square-foot complex. Terms of the deal were not disclosed.
Representatives from National and Ratkovich, along with those from CBRE, JLL and Lincoln Property did not immediately return requests for comment.
National and Ratkovich, along with Blue Vista Capital Management, paid $241 million for the former Macy’s Plaza in 2013. The partners developed the site into the Bloc, a sprawling retail and commercial property that includes a Sheraton Los Angeles Hotel, a 33-story office tower and underground access to 7th Street/Metro light rail station.
The news that Wayne Ratkovich’s eponymous development firm would be exiting the Bloc was not a complete surprise, insiders said. In February 2016, a $122 million CMBS loan the firm inherited was transferred to special servicer. The company acknowledged the Bloc had been $70 million over budget and took far longer to build than anticipated.
Much of the Bloc’s construction is now complete, except for the Alamo Drafthouse movie theater. But many storefronts remain vacant.
In the statement announcing it would sell its stake, Ratkovich said it will also continue to manage other assets, such as 5900 Wilshire and the Hercules Campus at Playa Vista. The company added it will focus on its other development projects, including the San Pedro Public Market and the Alhambra.
But Ratkovich has also had problems with the Alhambra development, a 45-acre mixed-use office campus. A $130 million loan attached to the complex was transferred to special servicing in August 2016. Following reports that the project had been slow to fill, a partnership led by Ratkovich and American International Group sold their majority stake in the project in February 2017. Ratkovich remains a minority partner, and oversees day-to-day operations.
And in April 2016, AXA Group bought out Ratkovich’s stake in the Peoples Bank Building at 5900 Wilshire Boulevard for $245 million. The partners, backed by institutional money, had jointly purchased the building in 2005. Ratkovich stayed on as manager.
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