Beverly Hills has lost another tenant to the city of L.A.’s three-year tax holiday.
HKS Architects Inc. relocated its local office to Westwood last week.
The Dallas firm signed a 10-year lease for 14,000 square feet on the 18th floor of the Oppenheimer Building, at 10880 Wilshire Blvd., with landlord Equity Office, an affiliate of New York’s Blackstone Group. Financial terms were not disclosed, but sources estimate the deal is valued at about $5.6 million.
The firm is moving from 9441 W. Olympic Blvd., where it occupied 22,000 square feet for the last decade.
Scott Hunter, principal at HKS, said that the reduction in square feet is a reflection of an improved interior design that eliminated perimeter offices to fit more people into one large open space. In fact, the new office in the 24-story glass high-rise will allow the firm to grow by an additional 15 employees to a total of 60 in the near future.
Hunter said the firm looked all over the county for a new office but settled on Westwood after finding the building and receiving the business tax holiday.
“It would have been a deal killer if we weren’t able to get that three-year tax holiday,” he said.
Beverly Hills, which charges a gross receipts tax, has struggled to compete with the L.A. tax relief, which gives a three-year break from gross receipts taxes to any firm moving into the city for the first time. Last year, Beverly Hills BMW and Beverly Hills Porsche both moved to Los Angeles, citing the tax holiday as a contributing factor.
The L.A. office of HKS’ design portfolio includes the W Hollywood Hotel & Residences, Montage Beverly Hills and Dodger Stadium renovations.
Justin Collins, vice president at Lincoln Property Co., represented HKS. Hunt Barnett, Peter Best, Karly Johnson and Beau Rawi at L.A. Realty Partners represented the landlord.
Beachside Blockbuster
In the largest apartment sale in Santa Monica since 2010, a 60-unit building only four blocks from the beach traded hands for $16.5 million last month.
New York real estate investment company M West Holdings LLC bought the property at 3111 Fourth St. last month from a local family trust, which has owned it since it was built in 1971.
It is M West’s 11th acquisition in Los Angeles in the 30 months it has been doing business here. Its strategy is to invest in multifamily properties, which the firm renovates, leases and manages long-term in New York and Southern California.
The building includes one- and two-bedroom units that average about 1,000 square feet, with monthly rents between $1,200 to $2,900. At the top of the Fourth Street hill, the building provides views of either the ocean or downtown Los Angeles from almost all of the units.
M West plans to renovate the building, including adding outdoor grills, a fitness center and storage facilities.
Yubin Tao, a broker with Investment Real Estate Associates in Encino who represented both sides of the deal, said that sellers were able to obtain the high price because the Santa Monica rental market continues to rise.
“Santa Monica is very much in demand,” Tao said. “Sellers are getting above asking price – and sometimes above market-value – for their buildings.”
This was the priciest sale in Santa Monica since a 49-unit building at 1241 Fifth St. sold for $19 million in September 2010.
Landmark Decision
The Beverly Hills Hotel became the first property to be named a historic landmark by the city of Beverly Hills’s new Cultural Heritage Commission last month.
The designation protects the hotel from future demolition and adds it to a registry maintained by the commission.
It’s a significant development for the city that for years has been criticized for having no mechanism to preserve historic and cultural sites, which include celebrity homes and haunts as well as a number of buildings designed by master architects. Sites, including the former Friars Club where celebrities like Jack Benny frequented, have been demolished by developers despite protests from residents and conservationists.
The growing outrage prompted the City Council to approve its first historic preservation ordinance in January. It required the city to create the Cultural Heritage Commission, which in May recommended that the 100-year-old hotel be on the list of historic properties. The hotel, designed by master architects Elmer Grey and Paul Williams, has historic significance for its celebrity guests and hosting of Hollywood events.
Christopher Cowdray, chief executive of the hotel’s owner, London-based Dorchester Collection, said that the distinction will be a point of pride for the hotel and his company.
“We are truly grateful to the city of Beverly Hills for this historic landmark honor,” Cowdray said.
Staff reporter Jacquelyn Ryan can be reached at [email protected] or (323) 549-5225, ext. 228.
