Promerica Bank is moving its downtown L.A. headquarters from a nearby building into expanded offices at 888 W. Sixth St.
Promerica, a business bank geared toward the Latino community, signed a lease last month for 14,000 square feet on the second floor of the property, owned by New York real estate investment and management company Somerset Group. The length of the lease was not disclosed, but the firm is estimated to be paying a monthly rate of about $2.50 a square foot, according to CoStar Group Inc.
The lease represents a 9,000-square-foot expansion from its current location at 888 S. Figueroa St., where the company has had 5,000 square feet since 2006. It’s not clear why the company is moving, but it has been doing well financially.
Promerica posted record operating profits and strong growth in the third quarter. Its net income was $285,000 (10 cents a share), compared with a net loss of $82,000 (-3 cents) in the same quarter a year earlier. Chief Executive John Quinn did not respond to requests for an interview.
The bank is a welcome tenant to the Sixth Street building, which has been undergoing renovations and improvements to reduce vacancies. This summer, New York’s JP Morgan Chase & Co. opened a flagship Chase Bank on the bottom floor. The deal earned it building-top signage, replacing that of Northwestern Mutual Life, which left years ago.
Promerica’s tenant improvements have already begun and the bank is expected to move in next month.
The landlord was represented by CRBE Group Inc. Senior Vice Presidents Phillip Sample and Chris Caras.
Completed Construction
AMCAL Multi-Housing Inc. has completed construction on a $21 million affordable-housing project in Pico-Union.
The Agoura Hills affordable-housing developer broke ground on the Mosaic Apartments in June 2010. The 63,000-square-foot complex at Pico Boulevard and Union Avenue will feature 56 affordable units and 1,800 square feet of ground-floor retail. The units range from one- to three-bedrooms and will rent for $395 to $851 a month.
Santa Monica’s Killefer Flammang Architects designed the two-building complex to blend in with the neighborhood, notable for its historic housing dating from the late 19th and early 20th centuries. The lot formerly was the site of a commercial building and parking lot.
The complex, which will open Dec. 8, includes a long courtyard, three smaller courtyards and a playground. It also includes a community room for social service programs.
The project was financed through an equity investment by New York’s Hudson Housing Capital, a loan from Minneapolis’ U.S. Bank, and financial assistance and tax credits from public agencies including the city of L.A.’s Redevelopment Agency and Housing Department.
“We are excited to be part of Pico-Union’s revitalization,” said AMCAL Chief Executive Percy Vaz in a statement. “Mosaic’s unique intergenerational mixed-use design allows families, seniors and local businesses to benefit from this development.”
Macerich Upgrade
Mall developer Macerich Co. got an upgrade to “buy” from “hold” by analysts at New York’s Goldman Sachs Group Inc. last week, but it hasn’t been enough to boost its stock.
Goldman Sachs’ upgrade raises the Santa Monica real estate investment trust to nine “buy” ratings and just one “sell” rating among 18 analysts following the company, according to Bloomberg News.
In its note to investors, Goldman Sachs said it was upgrading Macerich because of what it believes is the company’s strong investment pipeline and relative valuation to other retail REITs.
Among Macerich’s investments are a new outlet mall in Chicago and a mixed-use development in Walnut Creek known as Broadway Plaza.
However, the REIT’s stock closed at $45.93 on Nov. 23, off nearly $3 since the Goldman Sachs upgrade two days earlier.
Investors appear more concerned about the company failing to meet third quarter Wall Street estimates for its funds from operations, a critical REIT metric that excludes amortization and depreciation from earnings to give a better understanding of cash flow.
The company reported funds from operations of $104 million (73 cents a share), up from $93.3 million (66 cents) in the same quarter a year earlier. That was one penny short of estimates.
Macerich attributed the miss to problems at two malls that it is strategically handing back to lenders, including a Dallas property that is about 75 percent vacant.
Staff reporter Jacquelyn Ryan can be reached at [email protected] or (323) 549-5225, ext. 228.
