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 Resumed
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.
To kick off development once more, the council voted unanimously to adjust several zoning regulations, lifting the height restriction from 35 feet to 75 feet. The new ordinance should be approved within a month, after which Target can pick up its hammers once more.
Target did not return calls requesting comment. The councilman representing the neighborhood, Mitch O’Farrell, applauded the City Council’s decision.
“Target needs to complete the project and activate that very important commercial corner of Sunset Boulevard and Western Avenue in Hollywood,” he said in a statement. “It is time to look forward and not back. This project has overwhelming community support, will bring hundreds of construction jobs and permanent employment opportunities to local residents, and generate tax revenue so that L.A. can provide services our residents deserve.”
The empty store had become a symbol of heated development controversy in Hollywood. Construction of the Palladium Residences on Sunset has been opposed by the neighboring AIDS Healthcare Foundation, which said the project’s two 28-story towers would be too big for the neighborhood. The Los Angeles City Council voted last month to allow the project to proceed, but the foundation quickly slammed the city with a lawsuit. The foundation is also supporting a proposed ballot measure called the Neighborhood Integrity Initiative, which would put a ban of up to two years on any project that requires city approval to circumvent zoning rules.
Poke Invasion
Downtown’s dining scene is perking up with poke. Two fast-casual eateries that specialize in the Hawaiian-style seasoned fish salads have just signed leases in fast-developing retail zones. Hoke Poke has signed a 10-year lease in an apartment building on Eighth Street between Hope and Flower streets. Scheduled to open in July, it will take up about 1,200 square feet next to Jersey Mike’s Subs and Philz Coffee. The site is just across from the former Macy’s Plaza, set to re-open as the Bloc this summer after a sweeping renovation.
Not far away, in the Historic Core, OkiPoki will soon move in to the Alexandria apartment building with a five-year lease of 1,000 square feet.
Kennedy Wilson in Beverly Hills brokered the deals, representing both the landlords and the tenants.
Staff reporter Daina Beth Solomon can be reached at [email protected] or (323) 549-5225, ext. 237
