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The Honolulu Advertiser
Posted on: Saturday, February 27, 2010

California selling state buildings


By Judy Lin
Associated Press

SACRAMENTO, Calif. California has put the "for sale" sign on 11 state office buildings, including the San Francisco Civic Center and the Ronald Reagan State Building in Los Angeles, as a way to raise cash to shrink the budget deficit.

Los Angeles-based real estate firm CB Richard Ellis released a sales brochure yesterday as part of its marketing strategy to lure potential buyers. Combined, the buildings have more than 7 million square feet of office space.

State officials are hoping to draw offers worth more than $2 billion. Potential buyers have until April 14 to make offers.

California and other state and local governments have been eyeing their high-rises, prisons and even capitol buildings to generate fast cash for fiscal relief.

CB Richard Ellis Vice Chairman Kevin Shannon said the sale is a low-risk investment for potential buyers worldwide. Since the state is planning to lease the space back, it gives the new owners a steady stream of income.

The sale was adopted as part of last year's budget agreement between Gov. Arnold Schwarzenegger and lawmakers to raise money for the state. California is facing a $20 billion shortfall through the middle of next year.

The state plans to use proceeds of the sale to pay off more than $1 billion in bond debt that was taken out to construct the buildings. The state estimates it will net $660 million and put that into the general treasury.