Struggling Westside Office Building Sold To Canadian Outfit

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Struggling Westside Office Building Sold To Canadian Outfit

By DANNY KING

Staff Reporter

The Green Monster just got tamed.

The pine-colored Santa Monica Gateway office building, located alongside the 405 Freeway in West Los Angeles, has seen nothing but trouble since it was built in 1986.

But now a Canadian-based developer has purchased the 78,000-square-foot building at 11175 Santa Monica Blvd. from Chicago-based Equity Office Properties for $13.7 million. As part of the purchase by Santa Monica Gateway LLC, Canadian financial services giant ING Direct has signed a 66,000-square-foot-lease, bringing the building to full occupancy for the first time.

“The buyer and the tenant recognize the high visibility location and the quality of the renovation that was done,” said Chris Houge, senior managing director at Insignia/ESG Inc. and representative of both the buyer and seller on the deal.

Santa Monica Gateway is an affiliate of Castlepoint Development Corp. The Thornhill, Ontario-based developer is predominantly residential, having built 2,000 units throughout Canada. But the firm has also developed a number of retail and commercial properties.

Financial terms of the lease were not disclosed, but area real estate sources peg the lease rate at about $1.80 a foot.

A key point to the deal was building-top signage rights for ING Direct, whose brand will be exposed to the 43,000 cars that travel the section of the San Diego (405) Freeway just west of the building during peak hours.

The purchase marks a new chapter for the property, whose “Green Monster” nickname is derived from its washout past.

By the time it was purchased by investor Don Greenwood in 1994 for $2 million, the building was eight years old, had been taken back from developer Jim Schumacher by his lender, and was still incomplete and empty. Greenwood put it back on the market in the same condition, and it remained that way until he sold it to Spieker Properties Inc. for $11.2 million in early 2000.

In 1999, the Business Journal named it one of “Five Local Examples of How Not to Develop a Property.”

“The columns are in places that make it almost impossible to have efficient floor plans,” said Grubb & Ellis Co. Senior Vice President Joseph Gabbaian.

Spieker invested $4.5 million to complete and upgrade the building. Still, Equity Office, which absorbed Spieker Properties last year, has chosen to take a $2 million loss and walk away from a project that was just 15 percent leased at the time of the sale.

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