At $2 per square foot and featuring what building officials call the most state-of-the-art technical systems downtown, 617 W. Seventh St. is ready for tenants.
Off the market for more than two years while owner Hiro Real Estate Co. spent millions to renovate it from roof to sidewalk, the 12-story former Union Oil Co. headquarters officially returns Oct. 4 when brokers and Hiro officials host a walk-through of three spec suites.
Todd Anderson, a senior director at Cushman & Wakefield who will market the building, said the 1928 structure has all the architectural charm of the original. Hiro maintained the brick fa & #231;ade, concrete floors and open ceilings. What the landlord added was broadband infrastructure, fiber-optic phone lines, two telecommunications carriers with switching equipment on the main floor to serve as carriers for the building's tenants, and a new Los Angeles Department of Water and Power vault in the basement.
"It's plug and play for the tenant," Anderson said.
Anderson said Hiro, a Japanese company with U.S. operations headquartered in New York, wants to capitalize on the growing number of creative tenants moving or considering moving downtown. Most recently, Daniel Mann Johnson & Mendenhall moved from Wilshire Center to downtown's Arco Plaza. Altoon & Porter moved downtown from Miracle Mile earlier this year.
Anderson said marketing efforts would concentrate on architects, advertising agencies, design firms and small entertainment companies.
"This could become quite a trend if you look at what happened with residential (restoration)," Anderson said. "Nobody was listening to Tom Gilmore and now he can't build enough (lofts)."
Bruce Asper, a vice president at CB Richard Ellis Inc., said Anderson could be jumping the gun. While the mood is changing downtown and residential development continues to boost downtown residency, the type of tenant Hiro is after might be several years away from considering downtown.
"This type of building plays into the live/work community, but right now it's not a big absorber of space in downtown Los Angeles," Asper said.Negotiations Hit Snag
Speaking of Downtown, sources indicate that conflicting environmental impact reports have stalled negotiations between Shuwa Corp. and CIM Group for Shuwa's 7.2-acre former California Gas Co. property.
Sources said firms hired by CIM and Shuwa have found a different number of underground fuel tanks at the site. Negotiations over the actual number and who would be responsible for their removal is believed to be the final sticking point in what's estimated to be a $41 million deal.
Sources say that CIM wants to buy the property bounded by Eighth and Ninth streets and Flower and Hope streets, south of Macy's plaza and to build as many as 500 residential units, parking and a Ralphs grocery store.
Ralphs has had even less success negotiating with Shuwa and the city Community Redevelopment Agency to locate a grocery store on the property. Irving Bonios, a senior vice president at NAI Capital Commercial who represents Ralphs in the talks, said that deal also is stalled. The lack of progress has Ralphs officials thinking their return to downtown will be elsewhere.
"At the moment, the Ralphs deal is at an impasse, but they really want to establish a presence downtown," Bonios said. "It might be somewhere else, yes."
While Ralphs's eye is wandering downtown, there are no negotiations other than at the Shuwa site, Bonios said.Building Buys
Another downtown building is heading for residential conversion. Developer Barry Shy said he would close escrow Tuesday (Oct. 2) on the $5 million purchase of an office building at Seventh and Spring streets.
Shy, who is a partner in the conversion of the Higgins Building at Second and Main streets, said the 12-story building will be converted to 123 live-work lofts with 130 parking spaces in the basement, part of the first floor and the mezzanine. Existing ground floor retail will remain, Shy said. Ed Rosenthal, investment specialist with Grubb & Ellis Co., represented Shy in the purchase from Kong See Development
Peg Yorkin, founder and chairwoman of Feminist Majority Foundation, paid an undisclosed amount to buy a new West Coast headquarters for the organization. Yorkin bought the 10,500-square-foot office building at 433 S. Beverly Drive in Beverly Hills and plans to move the foundation's 25 employees from 8105 W. Third St. to the new place in March. F. Ronald Rader and Tibor Lody of Klabin Co., with Richard Rosenthal of the Rosenthal Group represented Yorkin in the transaction. Mitch Stokes of Madison Partners represented the seller, Westminster Properties of Los Angeles
John Chuck, founder and principal at Entertainment Lighting Services, paid $4.1 million for two properties on Sheldon Street in Sun Valley for expansion of the company's San Fernando Valley heaquarters. ELS, a lighting, rigging and staging company, will expand into a 69,585-square-foot building on the new site, which sits on three acres at 11440 Sheldon St. The second property is a half-acre plot at 11448 Sheldon St. that will be used for parking and storage. Bob Hoyer of Delphi Business Properties represented ELS in the deals. Ross Thomas of Delphi and Nigel Scott of Grubb & Ellis Co. represented the estate of Rose Dorfman, Nansee Lanning and Barry Dorfman, which was the seller of the three-acre parcel and building. Thomas also represented George and Nansee Lanning, sellers of the half-acre parcel
SBP Limited Partnership of Solon, Ohio, spent $2.5 million to buy a 49,951-square-foot industrial building at 3060 E. 44th Street in Vernon. The property was 100-percent leased at the time of the sale to Tremco Inc., a Cleveland-based roofing materials company. Steve Sprenger and Bart Pucci of Grubb & Ellis, along with David O'Neill of Colliers Seeley International Inc. represented the buyer in the transaction. The seller, Catellus Development Corp. of San Francisco, had its own representatives.
Staff reporter Christopher Keough can be reached at (323) 549-5225 ext. 235 or by e-mail at email@example.com.
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