Coretrust Capital Partners is a fledgling company with an enormous, significantly vacant asset on its hands: the Citigroup Center downtown that it purchased in November for $336 million.

But the daunting task of filling the 250,000 square feet – a full quarter of the building – that is now vacant is being hailed by its principals as precisely the kind of challenge that will get them back into the game after the breakup of their former company.

“This is what we’ve always done,” said Managing Principal John Sischo. “You have to put money back into a property. Buildings are living, breathing instruments. You have to feed them every day.”

Sischo worked with fellow Managing Principals Thomas Ricci and Randall Scott for 20 years at L.A. landlord Thomas Properties Group.

After Parkway Properties Inc. purchased Thomas in 2013, the trio decided to launch their own venture. Coretrust was born the following year.

“We literally started from scratch,” said Sischo, 60. “We’re one of those 20-year overnight wonders.”

Coretrust, with offices downtown and in Philadelphia, is moving quickly. The company poured just under $1 billion into acquisitions last year, sweeping up large properties in Philadelphia; the suburbs of Washington D.C.; and Los Angeles. It closed its first $250 million fund in 2015 through Austin, Texas-based private equity firm Hawkeye Partners and plans to kick off one targeting $500 million this year.

The goal is eventually to own major assets in central business districts nationwide.

Claudia Faust, Hawkeye’s managing partner, said she appreciates the depth of experience behind Coretrust.

“They’re so creative and so bright,” she said. “A lot of people who invest in real estate don’t have a methodical way of looking at opportunity and risk. These guys already have it.”

Major test

Turning around Citigroup Center might be a major test. The blue and silver 48-story tower that appeared on the “L.A. Law” TV show in the 1980s and ’90s has not had comprehensive renovations in years. It will compete with every other Bunker Hill skyscraper for tenants to fill its quarter-million square feet of empty space.

That 25 percent vacancy rate is well above downtown’s average of 16.4 percent last quarter, according to data from Jones Lang LaSalle.

But the building isn’t alone in struggling to find office tenants.

The 72-story U.S. Bank Tower next door, which sold in 2013 for $367.5 million, is 72 percent occupied, according to CoStar. The nearby One Cal Plaza is doing better, at 90 percent full, and its neighbor Two Cal Plaza is 80 percent leased.

For reprint and licensing requests for this article, CLICK HERE.