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.
The increase comes despite both markets posting an average 18 percent vacancy rate because of limited diversity of ownership of the buildings, the report said.
Three landlords control 88 percent of downtown’s top buildings while another three landlords control 49 percent of Century City’s. The quality of the buildings and their locations in city centers, combined with limited competition, allowed each to maintain or even increase rates despite vacancies.
Walter F. Conn is taking over as president of brokerage Charles Dunn Co. Inc.
The announcement comes more than a year after the company booted former President Chris Atkinson and lost former Chief Executive Chris Cooper to competitor Avison Young Inc.
Charles Dunn, owned by Conn’s father, Walter J. Conn, has been restructuring since July in an attempt to grow its services and market share.
Walter F. Conn has 17 years of experience in sales and management, including most recently serving as managing partner and owner of L.A.’s Figueroa Capital Group, a real estate financing company. He served as chief operating officer for Charles Dunn for over a decade through 2005. … John B. Kilroy Sr. has stepped down from his chairman position at West L.A. real estate investment trust Kilroy Realty Corp. He will be replaced by his son, John B. Kilroy Jr., chief executive and president. Kilroy Jr. will keep those responsibilities.
The senior Kilroy founded the company predecessor as a real estate developer and landlord for the aerospace and defense industries in 1947. He has served as the company’s chairman since it went public in 1997.
Staff reporter Jacquelyn Ryan can be reached at firstname.lastname@example.org or (323) 549-5225, ext. 228.
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