The Riady family could have gone to Wall Street and have Goldman Sachs or Credit Suisse advise them on purchasing the struggling US Bank building in downtown Los Angeles for $367.5 million.
Instead, they chose Valtus Capital Group, a Las Vegas-based investment banking firm, to run the pro forma on the 73-story, 1.4 million-square-foot office tower, the tallest west of the Mississippi River.
The US Bank building is in escrow with Overseas Union Enterprise, an Indonesian hotel and property group led by the Riady family. Ratings agency Fitch had warned that the half-empty building was in danger of imminent default and its loan had been transferred to a debt workout firm.
“We work with individuals that are very competent and capable in real estate,” Michael Riady said Thursday by phone from Singapore. “Valtus has a solid team that we’re very comfortable with. They gave us their full attention. We can’t deal with people with 50 clients. We needed a lot of attention on this. We worked over Christmas and New Year’s Eve.”
Valtus represented OUE in negotiating the transaction and structuring terms of the acquisition, Valtus managing director Viney Singal said.
He said OUE is making a $367 million bet on Los Angeles, and that portends favorably for Las Vegas. Investors such as the Genting Group of Malaysia, which acquired the stalled Echelon project on the Strip, are putting down big money to acquire “marquee” real estate assets in the United States.
“This transaction is very interesting because this is an iconic real estate asset in Los Angeles,” Singal said. “The Las Vegas real estate market many times mirrors what’s happening in Los Angeles because the economies are somewhat intertwined.”
Founded in 2006, Valtus provides merger and acquisition advisory services, including valuation analysis and identifying potential buyers. The company has eight employees working at its office in Hughes Financial Center.
In November, the company provided $187 million in debt financing for Caesars Entertainment Corp. to renovate Bill’s Gamblin’ Hall and Saloon. Previous Valtus transactions include $85 million in debt and equity financing for Southern Highlands Investment Partners; $45 million in secured credit for Eagle River casino and travel plaza in Whitecourt, Alberta; and $25 million for Rhapsody Partners for construction of a mixed-use project in northwest Las Vegas.
Singal said the U.S. economy is strengthening and he’s seeing significant foreign capital from worldwide investors enter the U.S. market.
“I’m very positive regarding the state of real estate in the Western part of the country,” the finance executive said. “Recovery in real estate is officially happening right now and I expect to see more marquee transactions both in Las Vegas and Southern California.”
Valtus Capital senior adviser Rutt Premsrirut, a finance graduate from University of Nevada, Las Vegas, said the US Bank transaction flew under everybody’s radar.
“We snuck in during Christmas, and everybody in the market was shocked,” he said.
In a statement, OUE Executive Chairman Stephen Riady said: “US Bank Tower is a well-positioned building that we expect to appeal to a broad base of both local and international office tenants operating in California.”
After a successful 2012, OUE is seeking “new avenues for growth where value can be identified and realized,” he said.
Contact reporter Hubble Smith at email@example.com or 702-383-0491.