A Los Angeles builder has found a new home, at a downtown site that could someday become homes.
Residential and hotel builder the Kor Group will move later this year after purchasing a 60,000-square-foot office building complex located at 1212-1224 S. Flower St. for $22.9 million.
Kor, a real estate investment, development and management firm, will shift from its current headquarters in the Miracle Mile area at 5750 Wilshire Blvd. in a move that not only gives the company a new corporate headquarters, but also a potential residential development site.
"They are in the business of residential development, so that site could eventually become a residential development site," said Madison Partners principal Chris Houge, who represented seller John A. Martin & Associates Inc. "The primary directive was to relocate from the Miracle Mile, though."
Kor's downtown residential projects include the Eastern Columbia condo tower at 849 S. Broadway, which will open later this month, and the 297-unit Barker Block loft development on Hewitt Street, among others. In addition to other residential developments, the company's local portfolio includes hotels in Santa Monica, Beverly Hills and West Hollywood.
After John A. Martin & Associates, a structural engineering and design firm, moves out of the Flower Street building in May, Kor will renovate the building.
Kor will move into the five-story building after the engineering firm vacates and will occupy the top four floors. The ground floor is currently leased out to a health care company. The deal, which closed Dec. 31, breaks down to about $382 a foot.
Houge called Kor a "perfect buyer."
"They wanted to get into a position where they own their corporate headquarters," said Houge, adding that Kor currently leases its space at 5750 Wilshire Blvd.
Kor declined to comment except to confirm the transaction has been finalized.
After the Flower Street sale, John A. Martin & Associates signed a 10-year lease for 32,000 square feet of office space at the Federal Reserve Bank Building, located at 950 S. Grand Ave. That $8 million lease deal with building owner the Federal Reserve Bank of San Francisco also closed Dec. 31.
Houge said that John A. Martin & Associates decided about six months ago that it was time to sell the Flower Street building.
"They wanted to get into a more efficient office space on one floor, which we accomplished," said Hougue, who represented the firm on the lease deal, which breaks down to about $2.09 per square foot per month.
In addition to Houge, Rick Buckley of Madison Partners and John Eichler and Marc Renard of Cushman & Wakefield represented John A. Martin & Associates on the building sale. Kor represented itself on the transaction.
Urban Eco Housing LLC is renovating a historic 1925 Cahuenga Boulevard apartment building in Hollywood and plans to add a regional coffee franchise, yoga studio and video rental store to 8,000 square feet of ground floor retail space at the building.
Urban Holdings, the parent of Urban Eco Housing, bought the five-story building 18 months ago for about $6 million from Alan Konce. In 2006, Urban Eco Housing, a multi-housing owner and developer, completed some preliminary renovations to the 104-unit apartment building. In December the firm began in earnest on a renovation of the building's plumbing and electrical systems, ground floor retail space and common areas.
Scott Chaplan, chief executive of Urban Eco Housing, said the character of the art deco-influenced building would be maintained. He said that new retail tenants would make the development a more "service-oriented site."
"We are hoping to bring more of a lifestyle project into the neighborhood with retail that will serve the community," Chaplan said. Currently the building is 80 percent occupied, and Chaplan said that rents would be raised once the renovation, which will take up to 18 months to complete, is finished. Most units at the building formerly the Flanders Hotel are between 400 and 800 square feet.
Sunset and Gordon
The Gerding Edlen Development Co. LLC is seeking entitlements this year to develop a mixed-use high-rise property on about 72,000 square feet of land at the northeast corner of Sunset Boulevard and Gordon Street in Hollywood. The project will provide the area with much-needed workforce housing, its boosters say.
Gerding Edlen bought 5925 Sunset Blvd. site in September for about $19 million from GTO Development LLC, which had planned to build a mixed-use development there.
In September, capital partner Genesis L.A. Economic Growth Corp. provided the project with a $16 million allocation from the New Markets Tax Credits program. Genesis L.A., a non-profit economic development company that invests in urban areas, has committed to using $30 million of its New Markets Tax Credits allocation for the project. According to Genesis, at least 40 percent of the units at the development will be priced at a workforce housing level at or below $410,000.
"The workforce housing is very much in our mission," said Brad Rosenberg, president of Genesis. "(It will) provide that part of Hollywood, which has many people who will have their own businesses, with workforce housing."
Tom Cody, principal with Gerding Edlen, a mixed-use urban developer, said that the economic impact of the project "will be over $500 million." In addition to condo units, the project will feature office space and retail space.
"It will be very catalytic to this area of Sunset Boulevard," Cody said. "The project is in its infancy and we have a long road to hoe in terms of entitlements." The company hopes to begin construction by early 2008.
The property is the site of the Old Spaghetti Factory building, which originally was the Los Angeles home of Columbia Broadcasting System. Some in the Hollywood preservationist community hoped to save the building, though it is not on any historic register, Cody said.
"It's our ambition with each and every project to approach it in a very collaborative manner. We want to optimize all of the opportunities presented in the project and to work to save all or part of the existing building," Cody said.
Staff reporter Daniel Miller can be reached at (323) 549-5225, ext. 263, or email@example.com .
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