Culture Clash, Opportunity Said to Lure Cox to Trammell

Real Estate
by Danny King

A post-merger hangover and the opportunity to oversee some of West Los Angeles' largest office developments apparently were key factors in the loss of Cushman & Wakefield Inc.'s head of downtown leasing to Trammell Crow Co.

Local real estate sources said that Bradley Cox, who had been managing director at Cushman & Wakefield and had been with the firm since 1997, would oversee Trammell Crow projects like the Water Garden and Century Plaza Towers.

Shortly after Cox's move to the Dallas-based development, leasing and management firm was announced, word came that Peter Best, a Trammell Crow principal and head of leasing at Century Plaza Towers, resigned.

Neither Cox nor Best returned calls seeking comment.

"Brad ran our Southern California operations and I think that took him away from what he really loved," said Andrew Ratner, executive managing director at Cushman & Wakefield. "His career began repping some of the finest office buildings in Southern California and he's back to doing that."

Todd Doney, executive managing director at Insignia/ESG Inc. and a former Cushman & Wakefield broker, agreed. "Brad was historically a landlord person, so he's going back to what he used to do."

New York-based Cushman & Wakefield merged with Cushman Realty Corp. last July. At the time of the merger, Cushman & Wakefield, a subsidiary of The Rockefeller Group founded in 1917, had 875 brokers in 163 international offices. Los Angeles-based Cushman Realty had 90 brokers in 11 offices nationwide.

Some said the Cox move might portend more movement from Cushman & Wakefield executives.

"I don't think that's the last defection you'll see," said one source, noting the clash between the more buttoned-down, East Coast-oriented culture of the pre-merger Cushman & Wakefield and the more boutique Cushman Realty. "When you have two very different cultures come together, very talented people get calls and the vultures circle."

Ratner denied that the merger was an issue.

"I do not think it was a factor at all," said Ratner, who will be taking over office management duties for Cox. "This is an opportunity that comes around very rarely."

Classic Case

With an eye on downtown Los Angeles for classic turnaround opportunities, a joint-venture of New York-based Praedium Group and Portland, Ore.-based ScanlanKemperBard Cos. has purchased the 214,000-square-foot 800 Wilshire Building at Wilshire Boulevard and Flower Street.

The partnership paid Sumitomo Life Realty $21.9 million for the 31-year-old building, which is 83 percent leased.

"Since it's a building with a small (13,500-foot) floor plate and the average tenant in downtown L.A. is quite small, it's a very attractive product," said Bob Scanlan, president of SKB.

Sumitomo had owned the building since 1986, and tenants include architectural firm Johnson Fain Partners (17,000 square feet) and law firm Robinson Dilando (12,000).

Scanlan hopes to bring leasing rates up to over $2 a foot from about $1.50.

"It's had some occupancy issues, but over time, it's really going to strengthen," said Tom Bohlinger, senior vice president at CB Richard Ellis. "They made a good buy."

The building was the first downtown purchase for the joint venture, which will continue to look for investment opportunities in the downtown area, said Scanlan.

"Over the next three to four years, there's quite a bit of rollover and we're very excited about that," said Scanlan.

Cushman & Wakefield Inc.'s Richard Plummer and John Eichler represented the seller on the deal while the buyers represented themselves.

Residential Revival

Two recent apartment complex purchases mark the continued resurgence of the Mid-Wilshire rental housing market.

Irvine-based Bascom Group bought the 128-unit Catalina Apartments at 333 S. Catalina St. for $12.5 million. The 116,000-square-foot complex is about 95 percent occupied.

The company, which owns 5,000 units throughout Southern California, bought the 142-unit building at 411 S. Virgil Ave. about three years ago.

"It's a very strong infill submarket," said Andrew Newton, acquisitions manager at Bascom. "There's a very strong income base that makes it very attractive."

The deal follows on the heels of Donald T. Sterling Corp.'s purchase of a 236-unit apartment complex at 687 Irolo St., which is about a mile away from the Catalina Apartments. Sterling paid $22 million, or about $93,000 a unit, for the 375,000-square-foot complex.

Bascom plans on investing $1.3 million in upgrades with hopes of boosting the average rent to $1,250 a month from about $1,100 a month, he added.

The $98,000 per-unit price is consistent with an area that has appreciated markedly over the past few years, according to Dean Zander, associate partner at apartment brokerage Hendricks & Partners.

"Buildings were selling for $55,000 to $60,000 a unit in '97 and '98," said Zander. "It's jumped in $5,000 to $10,000 increments every year since then."

Sandra Park of Wiseman Realty & Investment Co. represented both the buyer and the seller, Catalina Limited Partnership, on the deal.

Defiant Deal

The 32,500-square-foot Wilshire-Franklin building, which includes both office space and ground floor retail, recently sold for $8.6 million, or $265 a foot.

The building, at 3201 Wilshire Blvd., straddles the Santa Monica and Brentwood submarkets and is fully occupied, defying climbing vacancy rates in the area.

Mitchell Stokes, vice president at Madison Partners, represented both the buyer, Heidt-Wilshire I LP, and the seller, Brentwood Properties Inc., on the deal.

Despite its lofty price per foot figure, the building, whose rents range from $2.50 to $3.00 a foot, sold for a fair price, according to Westside investment broker Joseph Gabbaian, senior vice president at Grubb & Ellis Co. "As high as it sounds, the rents justify it," said Gabbaian.



Staff reporter Danny King can be reached at (323) 549-5225 ext. 230, or at dking@labusinessjournal.com.

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