City Club to Break With Bunker Hill Mentality

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The City Club on Bunker Hill is moving west to the financial core of downtown Los Angeles.

The private business club is close to finalizing a lease for 27,000 square feet on the top floor of Thomas Properties Group Inc.’s City National Plaza, at 555 S. Flower St.

The club, owned by Dallas private club operator ClubCorp., plans to spend $8.5 million to update its new home with modernized decor, new offices and a larger banquet hall.

The club has been in roughly the same amount of space at Wells Fargo Center, 333 S. Grand St., since its founding 25 years ago. The move is another blow to landlord MPG Office Trust Inc., which has been losing tenants from its core downtown office buildings as it struggles with debt and considers a strategic partner or new ownership.

David Woodyard, an executive vice president at ClubCorp, said the move was inspired by economics as well as a desire to be nearer to the heart of downtown.

“It’s closer to where more of our members are working today and we’re getting closer to L.A. Live and that side of town,” he said.

The new facility will include brand-new work like rooms that any of its 1,400 members can use and a banquet hall that can hold up to 300 people seated, about 100 more than the old one.

The City Club is the youngest of three prominent private social clubs downtown; the others are the Jonathan Club and California Club.

City Club was founded by late businessman Walter Beran and a group of L.A. professionals and leaders, in part as a response to exclusionary practices of the other clubs, which had a history of not allowing women and racial or religious minorities to become members. In fact, City Club opened on a platform of nondiscrimination while those existing clubs were locked in court battles trying to challenge a law that would have required them to halt their discriminatory practices. All the clubs now have nondiscriminatory membership rules.

The company plans to open the facility next summer but has yet to decide what the new name should be now that it’s not in Bunker Hill.

Darren Eades and Josh Wrobel of Jones Lang LaSalle Inc. in downtown represented City Club. Thomas Properties was represented in-house by Lalo Diaz.

Lofty Move

The Santa Fe Lofts traded hands for $35 million last week in one of the top sales of a downtown multifamily building in the last 12 months.

Bel Air commercial real estate company Capital Foresight bought the 132-unit property, at 121 E. Sixth St., from a partnership that included Kor Realty Group LLC of Beverly Hills. The partnership decided to sell because the property’s $25 million debt was maturing within the next year.

The trade, at roughly $163 a square foot, was among the top five sales in the downtown market in terms of both total value and square footage in a year. The top sale was of the Glo Apartments, at 1050 Wilshire Blvd., which sold for $64.7 million, or $318 a square foot, in November.

Capital Foresight liked the Santa Fe Lofts because of the growing downtown residential market and the strong cash flow of the building, which is 98 percent occupied, according to Brian Eisendrath at CBRE Group Inc.’s Capital Markets group.

Several companies made offers and Capital Foresight was ultimately selected in the end for its ability to close quickly. “We were able to approve and close a Fannie Mae transaction in under 30 days,” said Eisendrath, who helped arrange the buyer’s $23.8 million loan from the federally sponsored mortgage giant but was not a broker on the deal.

Built in the early 1900s, the building features mostly live-work lofts that cater to artists and other creatively bent tenants. Units average about 2,000 square feet with monthly rents ranging from $1,175 to $4,200, according to CoStar Group Inc. It has a rooftop deck, underground parking and 14,000 square feet of retail.

Capital Foresight intends to operate the building as is. Earlier this year, the company also bought an office building at 433 S. Spring St. as part of a group led by developer Izek Shomo, who plans redevelop it into condos.

Staff reporter Jacquelyn Ryan can be reached at [email protected] or (323) 549-5225, ext. 228.

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