The California Department of General services said Monday that the state chooses a Texas investment company to buy the state’s office buildings. The California First, LLC, a partnership led by Hines and Antarctica Capital Real Estate LLC is going to buy the 11 state office-buildings. The deal is made to help the State for its $19 billion budget deficit.
California First, LLC will pay $2.3 billion for the state’s office buildings which include the San Francisco Civic Center and the Ronald Reagan State Building in Los Angeles.
According to California City’s official, they receive more or less 300 bids for the office buildings, and had an extensive review of all the bids before they award it to California First, LLC. The bid is approved by the administration and Government last year.
The acting director of the California Department of General Services, Ron Diedrich said that the sale will help their government’s desperate needs of revenues, as well as to free the state from the cost and the continuing responsibility of possessing the office buildings.
California’s lawmakers with Gov. Arnold Schwarzenegger include the sale as part of the states budget. However, there are reports and concerns from the associated press about the deal. The reports said that the state will spend over $5.2 billion in rent, if they rent the office buildings for 20 years.
The state of California will lease the office buildings back from the new owner for the next 20 years at prefixed rates, and will not operate, repair and maintain the properties. The lease will also allow the state to buy back the office buildings anytime within the 20-year-contract.