Two new leases have brought a struggling Miracle Mile office building to near 80 percent occupancy.
Somerset Group, owner of the 168,862-square-foot, nine-story building at 5055 Wilshire Blvd., has signed leases totaling 40,000 square feet with Directors Guild of America’s Producer Pension Plan & Health Plan and Broadway Federal Bank.
The building was nearly fully leased when Somerset bought it for $45.1 million in 2008. Since then, tenants downsized or moved out due to mergers; occupancy dropped to just 60 percent last year.
Things started to look up this year, when listing brokerage CBRE Group Inc. began marketing its “creative office” design: polished concrete floors, exposed ceilings and operable windows.
The DGA Health Plan signed the largest of the deals, a 12-year lease for 26,737 square feet with an agreement for building-top signage. The benefits organization for guild members is moving its headquarters from a building the DGA owns at 8436 W. Third St. in West Hollywood. That building is for sale.
The company was attracted to the 5055 Wilshire building for its larger floor plates, allowing it to consolidate from multiple floors to just one, said Phillip Sample, a CBRE broker who represented the landlord in the deal. The move is planned for June.
Broadway Federal Bank is moving its headquarters after signing an eight-year lease for 12,947 square feet for both ground-floor retail and office space. The community banking company is leaving 4800 Wilshire this year.
Also in January, CO Architects, which has occupied the building for several years, renewed its 21,000-square-foot lease in an eight-year deal.
Financial details for all of the deals were not disclosed, but the building’s asking rates are between $2.35 and $2.45 a square foot monthly, Sample said.
CBRE’s Brad Chelf and Chris Caras also represented the landlord in the deals.
James Fisch at Travers Realty Corp. represented the DGA and Steven Gelber at Gelber Realty Corp. represented Broadway Federal.
Downtown Los Angeles and Century City charged an average 25 percent rent premium over the rest of the local office market despite high vacancy last year, according to a new report from Jones Lang LaSalle Inc.
In its Skyline report, which tracked Class A and trophy office properties in 34 city centers nationwide at the end of last year, the Chicago brokerage said asking rents increased in the past two years at downtown L.A.’s and Century City’s top buildings, pushing them ahead of the rest of Los Angeles by 25 percent. That’s an increase of two percentage points in the premium charged in those markets over 2010.
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