For years competitors have wished that City National Plaza, formerly Arco Plaza, were fully leased. Until that happened, downtown landlords complained, they wouldn't be able to raise rents.
Their wish may be coming true. Thomas Properties Group Inc. the building's owner signed 400,000 square feet worth of leases at the black twin obelisks at Fifth and Flower streets last year alone.
With those leases in hand, the 2 million-square-foot office buildings are roughly 46 percent vacant and one large tenant away from stabilizing the buildings' occupancy, according to Jim Thomas, the company's chairman and chief executive.
"We can make only one more big deal and then we'll be out of the big-deal market," said Thomas. "After that, we'll be over the hump."
When Thomas Properties Group bought Arco Plaza in 2003 for about $270 million, the buildings were close to 80 percent vacant and in need of renovation. However, Thomas Properties has been able to sign significant leases by offering tenants long periods of free rent and generous budgets to design and build-out their offices.
At the end of last month, Thomas Properties significantly expanded existing leases with signature tenants City National Corp. and Paul Hastings Janofsky & Walker LLP in deals worth nearly $40 million.
City National agreed to lease an additional 75,000 square feet, adding three floors to the 310,000 square feet the Beverly Hills-based company takes in the building's south tower.
The bank plans to consolidate more of its operations from throughout the region into the downtown location. The new space will coincide with the 15-year lease the company signed in November 2003. The value of the added space is around $32 million.
Additionally, law firm Paul Hastings signed an agreement to add 13,000 square feet to the space the company takes in the north tower. Assuming a standard 10-year lease for the additional space, the deal could be worth about $6 million.
Cushman & Wakefield Inc.'s Lynn Williams and Jeff Welch represented City National and Paul Hastings.
The company also signed leases with BreitBurn Energy Co. LLC, law firm Parker Milliken Clark O'Hara Samuelian and tenant representative brokerage The Staubach Co. that are cumulatively worth close to
BreitBurn Energy, one of California's largest independent oil companies, signed a 10-year, 26,000-square-foot lease that's worth about $9 million. The firm was represented by Cushman & Wakefield's Anthony Gotti.
Parker Milliken signed a 10-year lease for 26,000 square feet that's worth about $9 million. The law firm is leaving its offices of 30 years at Bank of America Plaza at 333 S. Hope St. for City National Plaza. And Staubach is consolidating its offices into City National Plaza, where the firm inked a seven-year lease for 20,000 square feet that's worth about $5.5 million.
Thomas said his company has been talking with several large tenants mostly from the Tri-Cities market about possibly relocating to City National Plaza. "We have some things up our sleeves," Thomas said. "We are working with some large tenants from outside the market."
Thomas Property Group's Kent Handleman and Charlie Smith negotiated the leases for the landlord.
Triple Net Properties LLC has listed a Torrance office complex that could fetch offers of more than $55 million.
The Santa Ana real estate firm has put the 211,000-square-foot complex at 20770 Madrona Ave. on the market along with a San Diego office building.
The building is owned by G REIT Inc., which is managed by Triple Net Properties.
The Torrance office complex consists of four single-tenant buildings, three of which are leased. The three tenants include: the headquarters of American Honda Finance Corp., Deere & Co. subsidiary NavCom Technology Inc. and Kaiser Foundation Health Plan Inc.
Leasing the fourth, 32,000-square-foot building represents the short-term upside potential in the project, which was built 15 years ago as a corporate headquarters for Epson America Inc.
The sales team of Kevin Shannon at Grubb & Ellis has the listings on the two properties.
Broadway Real Estate Partners LLC has put a 12-story office building at 9701 Wilshire Blvd. on the market. A final price is expected to top $55 million.
That would result in a tidy profit for New York-based Broadway Real Estate Partners, which purchased the building less than two years ago for $37.6 million. During its brief ownership of the property, Broadway was able to boost the building's occupancy to 94 percent from about 85 percent.
The 109,000-square-foot building at the northwest corner of Wilshire Boulevard and Roxbury Drive, is in Beverly Hills' Golden Triangle an area with some of the city's highest office rents and lowest vacancies.
At the end of December, Beverly Hills had a 7.8 percent vacancy rate and average asking rents of $2.98 a foot, according to Grubb & Ellis Co. Of the large office markets in L.A. County, only Santa Monica had buildings with higher occupancy and rates.
The building was Broadway's first foray into Los Angeles, where the company has become an active investor, buying and selling holdings.
In November 2004, the company bought the Wilshire Rodeo Plaza, a 237,000-square-foot retail and office building at 9536-9560 Wilshire Blvd. for $151 million. After re-signing a lease with United Talent Agency, Broadway Real Estate Partners put the property on the market late last year.
Just before the company listed the Wilshire Rodeo Plaza, Broadway Real Estate Partners agreed to buy the Aon Center at 707 Wilshire Blvd. at 62 stories, the second tallest building in downtown L.A. from Chicago-based Transwestern Investment Co. for $192 million.
Bob Safai, a principal at Madison Partners, has the listing for 9701 Wilshire Blvd.
*Staff reporter Andy Fixmer can be reached at (323) 549-5225, ext. 263, or at firstname.lastname@example.org .
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