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.
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