Lease Deal Has SBC Moving to Transamerica Center

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Lease Deal Has SBC Moving to Transamerica Center

By ANDY FIXMER

Staff Reporter

SBC Communications Inc. has signed one of the biggest leases of the year in downtown L.A., a $50 million deal for 225,000 square feet at the Transamerica Center.

The 10-year deal will represent a consolidation for SBC, which takes the entire 320,000-square-foot building at 1010 Wilshire Blvd. in a lease that expires next year. The deal will also include signage atop the 32-story building at 1150 S. Olive St., according to sources familiar with the transaction, although it was unclear whether the signage rights were included in the transaction value.

Transamerica Center, a three-building, 1.4 million-square-foot complex has been the center of considerable activity lately. Last week, the City Council postponed a decision on whether to buy one of the buildings for $50 million to serve as Police Department headquarters while a new building was constructed.

The complex was purchased by a group that includes New Pacific Realty Corp. and Canyon-Johnson Urban Fund LP for $88 million in April 2003. The partners said at the time that they intended to convert a portion of the complex into apartments.

David Margulies, a principal at New Pacific Realty, did not return calls seeking comment. Canyon-Johnson officials couldn’t be reached.

The third building in the complex is mostly leased by the California State Bar Association, which takes 150,000-square-feet.

The lease is a boost to the Transamerica Center, long considered a fringe downtown office building because of its location about two miles south of the Bunker Hill financial district.

But in recent years the area around the center has been re-energized with the construction of hundreds of new apartment and condominium units and the prospect of a new sports/entertainment complex surrounding the Staples Center.

With SBC moving in, the 452-foot high tower is more than 90 percent leased. Insurer Transamerica, which sold the building, has five years left on its lease in the building for 400,000 square feet, according to sources.

SBC has been in the market since late least year, and was said to have narrowed its choice to either the Transamerica Center or Arco Plaza.

That choice may have been made for the San Antonio-based telecommunications firm when City National Bank took 315,000 square feet at Arco Plaza’s north tower.

Whitley Collins, senior vice president at CB Richard Ellis Inc., represented SBC on its lease. The landlord was represented internally.

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