Hanover Co., a national developer of luxury apartments, is planning on renting out the primo penthouse at its new downtown apartment building for $19,000 a month.
The two-story unit on the 26th floor of 717 Olympic has about 2,000 square feet of indoor space and 600 square feet of outdoor terrace space and is the most expensive new rental unit on the market downtown.
But it could be off the market soon.
Kevin Batchelor, a regional partner with Dallas-based Hanover, said that a lease deal with an unnamed party is pending. Four other less expansive penthouse units are still available, as are far more modest units starting at $2,500 per month.
"We've been impressed with the level of demand at the building," said Batchelor, who noted 12 leases have been signed. "It is coming from every sector: USC students, entertainment executives, dual-income professionals and empty nesters."
The 151-unit building opens June 1 as the downtown residential market is clearly slowing down. But Batchelor maintained the building's location, kitty-cornered from the massive L.A. Live mixed-use development, makes it appealing.
He added that several of the lease deals already signed at 717 are with tenants who eventually plan to live in the Ritz-Carlton condos at L.A. Live once they are completed in 2010.
The building's name points to its location at 717 W. Olympic Blvd.
Since the ouster of CEO Robert F. Maguire from Maguire Properties Inc., new Chief Executive Nelson Rising has been thrust into the role of plugging the dike.
Rising, who took over May 19 after the weekend departure of Maguire, spent his first few days on the job reaching out to major shareholders, speaking to Wall Street analysts and meeting senior employees.
"I've been quite busy," said Rising, who has a reputation for leading turnarounds since taking over struggling Catellus Development Corp. in 1994 and leading that real estate company into the black. "This has been a very intense period of understanding the challenges and opportunities and how to respond to both."
It has been a rough year for the local real estate investment trust, which has seen its stock price lose half of its value amid unsuccessful attempts by Maguire to take the company private.
The company got into trouble after purchasing a slew of Orange County office buildings in February 2007 shortly before the market was promptly rocked by the subprime meltdown, which led many office tenants to close up shop. The purchase also left the company highly leveraged, making investors wary.
But Rising said the company is in better shape than Catellus was when he took it over. "This company has some extraordinary assets and some tremendous opportunities. There is an organization in place."
Much of the company's portfolio is in downtown L.A., including the U.S. Bank Tower, the tallest office building west of the Mississippi River.
Rising said that he had spoken to Maguire, a former longtime business associate, since taking over. While Maguire offered no advice, "he offered up a lot of encouragement. The relationship is very cordial."
Rising also is chairman of the Grand Avenue Committee, which is overseeing the $2.1 billion Related Cos. redevelopment project next to Disney Hall. Rising said his new post may force him to step down from the committee chairmanship.
Los Angeles-based industrial developer Rexford Industrial LLC has paid $6.2 million for a 57,900-square-foot industrial complex in Glendale.
The property, at 700 Allen Ave., includes five structures on a 1.4-acre lot, and is occupied by Grant Products, a manufacturer of aftermarket automotive accessories.
The company has 18 months left on its lease and at the end of the term, Rexford may reconfigure the property for creative office use or spiff it up and lease it as is. The company has budgeted $2.3 million for a creative office makeover or $400,000 for an industrial renovation.
"It was built in the 1950s, it's brick, it has a lot of natural light. It is the kind of building that if it was in Santa Monica or Century City, Yahoo would be in it and it would be a creative office," said Howard Schwimmer of Rexford.
The building was sold by Peterson Family Trust, which manages the estate of Grant Products' founder. The deal, which includes a 36-car parking lot across the street, closed April 1.
Peter Castleton of Voit Commercial Brokerage represented both sides of the deal.
The Chicago School of Professional Psychology will open a branch in downtown L.A. this fall where it will offer graduate-level courses.
The school signed a 10-year lease for nearly 16,000 square feet at 617 W. Seventh St. in a deal that closed April 20. The rental rate starts at about $1.60 per square foot per month for a total consideration of $5.4 million.
Alliance Commercial Partners LLC, which also owns downtown's iconic Pacific Center, is the landlord. The office building is now 80 percent leased a new high in recent years, said Jonathan Larsen of Transwestern, who represented Denver-based Alliance.
"With the resurgence of downtown they feel they can tap into young people who are living downtown," he said.
Larsen said that school is spending about $100 per square foot a combination of its own funds and a "substantial" tenant improvement allowance to upgrade the space.
The school will open Sept. 1 when the fall semester begins.
J.D. DeRosa of Transwestern also represented the tenant. Jon Zanetos and Mark O'Brien of CB Richard Ellis Group represented the landlord.
Staff reporter Daniel Miller can be reached at firstname.lastname@example.org or (323) 549-5225, ext. 263.
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