Can’t get your business into Playa Vista or Santa Monica? Tim Lee is hoping you’ll turn to Culver City instead.
His Olive Hill Group investment firm, based in downtown Los Angeles, just bought two office buildings slightly east of the 405 freeway for $65.6 million.
“A lot of spillover is coming over from the traditional Westside market,” said Lee, Olive Hill’s vice president of corporate development. “Clients are looking for more value and room to grow.”
Rents at the site, just off Slauson Avenue, are about $3 a square foot, compared to rates as high as $6 in Santa Monica. Olive Hill is planning to spend several million dollars on renovations for the 30-year-old building, transforming traditional offices into creative spaces with concrete floors, high ceilings, and open floorplans.
“The style of working has changed. Instead of private offices, people are looking for collaborative, open space,” said Lee. “We’re no longer tied to a desk and private offices.”
After the renovations, Olive Hill aims to bump up rents to $3.50 or $4. The building is about 88 percent leased, with tenants including State Farm Life Insurance Co., analysis firm Data Science Inc. and Japanese cosmetics company Shiseido Co., whose executives appreciate the proximity to the airport. Olive Hill expects to soon lock down a 7-year lease for 11,000 square feet with a European marketing company. It also plans to scout for technology companies attracted to nearby Silicon Beach.
Lee, a former attorney for tech startups, said he is monitoring concerns of a tech bubble about to pop, but anticipates any drops in the industry’s value to eventually bounce back.
“This is different from 2001, where you had companies with no revenues going public,” he said, adding that Olive Hill wants a long-term hold on its new site, for which it paid about $315 a square foot.
“This isn’t something we plan to flip in the next five or 10 years,” he added.
Olive Hill was spun off from President Michael Cho’s family investment firm, and holds 15 million square feet of commercial offices throughout the Southwest with an aggregate value of $2.4 billion.
Target Corp.’s on-again, off-again relationship with Hollywood is back on. The giant retailer was just given a pathway by the Los Angeles City Council to resume building a three-level store at the corner of Sunset Boulevard and Western Avenue. Construction had begun several years ago, but was halted by a lawsuit from community groups that opposed the large development. A hulking shell was left looming over the intersection since 2014.
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