Judah Hertz Group Eyeing Downtown Office Tower
By DANNY KING
Judah Hertz, one of the biggest individual investors in downtown real estate, has his sights set on the City National Bank headquarters at 606 S. Olive St.
"We're looking at buying it," said Kit Marchel, president of Hertz Investment Group, who said talks with owner City National Buckeye began about a month ago. With the Hertz-owned Oviatt Building across the street, "it makes great sense for us we can create economies of scale," said Marchel.
There are no guarantees City National will sell, however.
The bank, which stepped into the market with a 240,000 square foot requirement last summer, has since reduced its needs to between 150,000 and 200,000 square feet. It is looking at Burbank, another downtown spot or staying put. If it stays, the building is unlikely to be sold.
A spokesperson for Bram Goldsmith, chairman of parent City National Corp., said talks with Hertz are simply "a conversation at this time." The Goldsmith family (Russell Goldsmith, Bram's son, is City National Bank's chief executive) has at least a majority, if not full, ownership stake in City National Buckeye, according to sources familiar with the property.
The source said a decision about the move would come in the next 30 to 45 days.
The building is fully leased, with asking rents in the $1.50 a foot range said one source close to the process.
"If City National stays, I don't think it's for sale," said a source. "They're selling the building if they leave. They don't want to be in the real estate business."
City National takes more than half of the space in the 291,000-square-foot building, and if it left the property would be worth about $100 a foot, or about $29 million, said the source.
Hertz has led investor groups that have purchased a number of buildings downtown over the past six years, the most prominent being the 618,000-square-foot Union Bank Plaza, bought last year for $89 million.
"He likes to buy class-B buildings and mange them," said David Doupe, executive managing director for Insignia/ESG Inc. "City National is a perfect deal for him."
Located at the southeast corner of 6th and Olive streets across from Pershing Square, the 24-story structure was built in 1967. In addition to City National Bank, its tenants include the Central City Association, Los Angeles Downtown Center Business Improvement District and Center for Nonprofit Management.
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