Developer Jerry Snyder is preparing to break ground on Hollywood’s first new office building since the Great Recession.
His Miracle Mile firm, J.H. Snyder Co., plans to begin construction on a 250,000-square-foot office campus at 959 Seward St. within nine months, according to Kacy Keys, the company’s senior vice president.
The $120 million project, featuring two adjacent four-story Class A office buildings, has been entitled since 2008 but the company put it on hold as the economy bottomed out.
Keys said there has been significant leasing interest from entertainment companies, but so far none have been willing to sign. Still, Snyder is confident about the market and has decided to go ahead on a spec basis.
“Jerry is saying sometimes you gotta build it for people to see the vision and how great it is,” Keys said. “It’s hard to show someone a piece of dirt and say, ‘Can’t you see yourself signing a lease for a building that’s not built?’”
Santa Monica’s Jerde Partnership is the architect on the project, which will be constructed in two phases, each with a construction timeline of about a year. The first phase is a 140,000-square-foot building on Seward Street between Romaine Street and Barton Avenue. A second 110,000-square-foot building would be constructed some time later.
The complex will feature a landscaped courtyard with outdoor seating and possibly some food carts to provide a “campus feeling,” Keys said.
The last large office building constructed in Hollywood was in 2008 when Hudson Pacific Properties Inc. built a 115,000-square-foot building for post-production house Technicolor at 6040 Sunset Blvd.
This would be the second project Snyder breaks ground within a year. Last month, his company started work on a $150 million, 464-unit mixed-use apartment project at Vermont Avenue and Wilshire Boulevard.
Legal Lease
Morrison & Foerster LLP is moving out of its longtime home in downtown’s Gas Co. Tower for Aon Center.
The San Francisco law firm signed a 15-year lease for about 77,300-square-feet on the top four floors of the 707 Wilshire Blvd. building, owned by Beacon Capital Partners. That’s substantially smaller than the 160,000-square-feet it occupied at the Gas Co. building owned by MPG Office Trust Inc. at 555 W. Fifth St.
Financial terms were not disclosed, but industry sources peg the deal at about $21 million.
Gregory Koltun, managing partner of Morrison & Foerster’s L.A. office, said that the Aon Center’s smaller floor plate was appealing.
The firm dropped 20 employees in 2010 and now employs 94 locally.
But the move is likely to come as a hit to cash-strapped MPG Office Trust, which has been struggling to keep up the occupancy of its downtown buildings as it sells off much of its non-core assets to pay down millions in debt. Southern California Gas, which has a building-top signage deal, recently reduced its space there by about 200,000 square feet. The total losses will drop the occupancy of the 1.3 million-square-foot building to well below 80 percent.
However, Jonathan Larsen, regional managing principal of brokerage Cassidy Turley Inc.’s downtown office, said the tower is still prime real estate. “They have pretty nice space Morrison & Foerster is leaving and there may be other law firms that would be able to move in,” he said
Tony Morales, Josh Wrobel and Maureen Hawley of Jones Lang LaSalle Inc. represented the tenant. Jones Lang LaSalle’s John McAniff, Tim Miller and Marin Rutherford , along with Means Knaus Partners’ Andy Fishburn, represented the landlord.
Sunset Sale
In what would be the county’s largest retail sale this year, a shopping center on the outskirts of West Hollywood is about to close for $110 million this month, according to CoStar Group Inc.
Sources told the Business Journal that Weingarten Realty Investors intends to buy the 176,000-square-foot property at 8000 W. Sunset Blvd. from Chicago’s Pearlmark Real Estate Partners.
It’s not clear why Pearlmark, which bought the center for $66 million in 2006, has decided to sell, or what Weingarten’s plans are for it. Calls to both companies and their brokers were not returned.
Pearlmark completed a $9 million renovation on the property at the corner of Crescent Heights Boulevard in 2008. Tenants include a Crunch Fitness Gym, Trader Joe’s grocery and a multiscreen theater.
Weingarten, a Houston real estate development and investment firm, owns or operates 309 neighborhood and community shopping centers nationwide totaling 56.8 million square feet. This would be its third L.A. retail property.
Staff reporter Jacquelyn Ryan can be reached at [email protected] or (323) 549-5225, ext. 228.
