A downtown Los Angeles office tower has sold for well below its prior pricing as landlords in that city and others nationwide deal with slower demand.

Real estate services firm Asia Pacific Capital Co. announced the sale of the 25-story tower at 801 S. Figueroa St., but did not disclose the buyer or price. Citing sources familiar with the transaction, the news site Commercial Observer reported that an unnamed Chinese investor paid $60 million or about $129 per square foot for the tower, in a deal involving the transfer of the property’s existing loan debt.

Public deed filings showed the property has been transferred to a limited liability company based in Arcadia, California.

CoStar data showed the property, built in 1991 and also known as 801 Tower, was acquired by investment firm Barings of Charlotte, North Carolina, for $197 million or about $423 per square foot in September 2014. Barings did not immediately respond to a request to comment from CoStar News on the latest sale, which closed in late July.

A statement from Asia Pacific Capital, which represented the buyer, said the acquisition price “was significantly below replacement cost, presenting a compelling opportunity for investors and wealthy individuals looking to enter the market.”

The deal comes after owners of several downtown Los Angeles towers have encountered challenges in making loan payments or refinancing properties amid elevated interest rates and falling demand for office space.

Those owners include Toronto-based Brookfield, which has several downtown L.A. properties. That firm defaulted on loans for two downtown towers during 2023, leading to receivership, and last month saw a $400 million loan on another downtown tower transferred to special servicing.

Another struggling downtown office property owned by Brookfield, known as the Gas Company Tower, is being marketed for sale by brokers at JLL, which was hired by a court-appointed receiver. That property is being eyed by the county of Los Angeles for a purchase that could amount to around $215 million or $153 per square foot, according to regional media reports. 

Office demand in downtown Los Angeles has been falling for several years, but the trend was exacerbated by the COVID-19 pandemic as preferences for remote and hybrid work schedules have remained in place in major cities nationwide. Similar conditions have been cited in other office tower deals priced well below prior transactions in numerous cities, including San Francisco, Chicago and St. Louis.

“Headwinds persist in downtown Los Angeles’ office market in the third quarter, with market conditions at their worst position in decades,” Ryan Patap, senior director of market analytics for CoStar Group in Los Angeles, said in a recent market report. “Tenant activity has been relatively restrained in recent quarters. Additionally, many tenants continue to downsize or vacate spaces.”

CoStar data showed downtown Los Angeles has a current office vacancy rate of 21.8%. Before the Figueroa Street tower trade, the downtown area posted $53.2 million in office property sales during the past 12 months, down 88% from the previous year, as the neighborhood’s average asking rent rose by a slight 0.1%.

The latest available CoStar data showed the vacancy rate at 26.9% for the Figueroa Street tower. Current tenants include CTBC Bank and several other financial and professional service firms.

In the latest Los Angeles tower deal, Asia Pacific Capital Co. represented the buyer and Eastdil Secured represented the seller.