Editor’s Note:

The online version of this story has been corrected to note that the city’s 10-year lease at 1200 W. Seventh St. will escalate annually by 3 percent.

The city of Los Angeles has renewed a lease for 170,087 square feet at the Garland Center in a $47 million deal that is the largest in downtown Los Angeles this year.

The deal with Charter Holdings Inc., a subsidiary of Wells Fargo & Co., closed July 31. Charter has a master lease with the building owner, private investment partnership Trumbull & Associates LLP.

The 10-year lease at the 1200 W. Seventh St. building starts at roughly $2 per square foot per month on a full-service gross basis and escalates annually by 3 percent, said Jason Warner of CB Richard Ellis Group Inc., who represented Charter.

The city houses the community development and housing departments at the building but is giving back about 53,000 square feet of space. That move is part of the city’s long-term plan to maintain offices in buildings it owns, said Reginald Byron Jones-Sawyer, Sr., the city’s director of asset management.

Last year, the city purchased the 600,000-square-foot Figueroa Plaza office property in downtown and is moving offices there. “We are trying to reduce lease costs significantly by owning buildings rather than leasing,” said Jones-Sawyer.

The 724,000-square-foot, nine-story Garland Center has about 270,000 square feet of data center space.

David Kluth of UGL Equis and Mark Sullivan of Studley Inc. represented the city.

Century City Lease

Bethesda, MD-based Reznick Group PC, an accounting firm that specializes in real estate, has signed a lease for office space in Century City and will open its first permanent Los Angeles office there by the end of the year.

The early August deal for 17,640 square feet at 1888 Century Park East is valued in excess of $12 million.

“They are on a very aggressive 10-year strategic expansion plan and their goal is to become a top-10 national accounting firm,” said Blake Mirkin of CB Richard Ellis Group, who represented Reznick in the 84-month lease. “L.A. is a critical location to expedite that plan.”

Reznick has had temporary offices elsewhere in the 21-story building for the past year, Mirkin said. The company’s new digs will get an extensive upgrade.

Mirkin declined to discuss the start rate of the deal with the landlord, a partnership of Broadway Partners Fund Manager LLC and Equity Office Properties Trust that operates under the 1888 CP Property LLC name. But Mirkin called it market-rate, adding, “We got what we consider to be a very attractive deal based on the market.”

Andrew Goodman represented the landlord in-house.

Koreatown Apartment Sale

It took over two years 26 months to be exact but the sale of a 168-unit apartment building in Koreatown finally closed last month.

The $32 million deal for Wilshire Tower at 3460 W. Seventh St. had a long escrow period so that the buyer, an unnamed Chicago-based real estate investor using the Federal Street LA LLC name, could secure a condo tract map for the property.

Of course, the housing market has declined sharply in the past year, making the proposition of a condo conversion even in the relatively robust Koreatown area a tricky proposition.

“I think the buyer got pretty far down the road with the deal and had invested a lot of money to get the tract map and they still wanted to proceed forward even though the market had changed,” said Laurie Lustig-Bower of CB Richard Ellis Group, who represented both sides of the deal. “Even though the conditions in the market have changed, based on the intrinsics, the deal still makes sense today.”

The seller was Wilshire Tower Apartments LLC, the entity of an unnamed European real estate investor with an office in Anaheim. The deal for the 179,989-square-foot, 13-story property, which includes 5,600 square feet of retail space, breaks down to about $178 per square foot.

Adrienne Barr of CB Richard Ellis Group, who also represented both sides of the deal, said that the transaction was not contingent on securing the condo tract map, though she believes the conversion will be pursued.

Nancy Badzey of CB Richard Ellis Group also represented both parties.

Staff reporter Daniel Miller can be reached at [email protected] or (323) 549-5225, ext. 263.