Two downtown Los Angeles skyscrapers officially traded hands less than 48 hours before a new city tax on real estate sales takes effect, a levy that some brokers say will reduce demand for large properties in a struggling market.

New York private equity firm Waterbridge Capital closed Thursday on the 40-story, roughly 701,000-square-foot Union Bank Plaza office tower at 445 S. Figueroa St. for $111 million, or $158 per square foot, according to sources with direct knowledge of the deal. The building sold for less than its price the last time it was on the market, when it traded to Newport Beach, California-based real estate investment firm KBS for $208 million in September 2010, according to CoStar data.

Meanwhile, the roughly 215,000-square-foot 801 S. Grand Ave. office building sold for $47 million, or about $218 per square foot, according to one person with direct knowledge of the deal. More details about the buyer weren't immediately available to CoStar News. The seller was Los Angeles-based CIM Group. The property was marketed for $55 million, according to CoStar data.

Both sales are well below the $411-per-square-foot average for downtown Los Angeles office deals, according to CoStar data.

Downtown Los Angeles office building sales have slowed since the start of the pandemic because of market uncertainty, making any sale stand out. Since March 2020, six properties with more than 100,000 square feet of office space have sold in downtown Los Angeles, according to CoStar data, down from the 11 traded in the prior three years.

In recent months, the downtown Los Angeles office market has witnessed some building owners defaulting on loans while some other owners have been foreclosed on as analysts say owners and lenders are attempting to figure out what their buildings are worth in the face of waning demand. Downtown office demand has been hurt by the market's older buildings, the increase in working from home, some companies making cutbacks and layoffs and concern over crime and cleanliness downtown.

Downtown L.A. office vacancy has risen to 18.8%, the highest level CoStar has recorded. That said, the market was hurting before the pandemic with high vacancies and less-than-robust leasing activity. L.A.'s average office vacancy is 15.1%.

The two skyscrapers may not be the last high-profile commercial or residential properties to sell before April 1, when Proposition ULA, an acronym for United to House L.A., takes effect in the city of Los Angeles. ULA, better known as the mansion tax, is an increase in the city's transfer tax on all properties, commercial and residential, selling for more than $5 million.

A 4% tax will be applied on properties sold or transferred for more than $5 million, and a 5.5% tax will be levied on properties sold or transferred for more than $10 million. Those rates will replace the current 0.45% transfer tax rate.

A number of other Los Angeles commercial buildings, from offices to malls, went up for sale in the months ahead of the taking effect. Real estate brokers attempted to woo buyers with incentives to make deals happen. That drive to sell extended to the luxury residential market, too, with some sellers offering buyers Bentleys and McLarens if buyers could complete deals before April 1, according to the Los Angeles Times.

The tax is expected to fund projects promoting housing construction and alleviating L.A.'s worsening homelessness problem.

Cushman & Wakefield's Vice Chairman Mike Condon and Senior Director Erica Finck represented the buyer in the Union Bank Plaza deal. Newmark’s Co-Head of U.S. Capital Markets Kevin Shannon represented the seller. Newmark also represented the seller in the 801 S. Grand Ave. sale. Colliers’ Vice Chair Sean Fulp, Executive Vice Presidents Mark Schuessler and Ryan Plummer, and Senior Vice President Jason Roth sourced the financing for the Union Bank Plaza sale from Los Angeles-based family office BH Properties.