As commercial real estate markets continue to recover from the depths of recession in L.A., most of the growth of the tenant base has come from internal expansion of companies already operating here.
But last week, local landlords were anticipating some good news. A new tenant came to town and was close to leasing up 56,000 square feet of vacant office space.
Less surprising is the fact that the new outfit is from the creative field and is settling on the Westside, where momentum from that sector is pushing vacancies down and rents up.
If the deal is finalized, the Pennsylvania-based company that owns and operates a dozen Art Institutes around the country (and a couple of other trade schools) will take up residence at the big Santa Monica Business Park near the Santa Monica Airport.
The new Art Institute of Los Angeles represents the first California location for Nasdaq-traded Education Management Corp. The L.A. school is planning to lease space at the 2900 31st St. building within the lowrise office campus on a long-term basis, and ultimately to occupy the entire building.
EMC’s Art Institutes offer programs in high-growth fields such as animation, graphic arts and multimedia, as well as more traditional media such as advertising design, industrial and interior design, video production and culinary arts.
Financial details of the transaction weren’t disclosed.
The institute is planning to ink the deal with the 900,000-square-foot business park’s primary developer, a partnership headed by Shurl Curci, principal of Torrance-based Transpacific Development Co.
Peter Best, formerly of Grubb & Ellis Co. who recently joined Tooley & Co. to handle leasing at the landmark Century Plaza Towers, is negotiating the lease on Education Management’s behalf.
Julien J. Studley Inc.’s Bruce Schuman, Scott Katcher and Robert Peddicord (who recently joined the Arden Realty REIT), is negotiating for the landlord along with Transpacific’s Alan Pyenson.
REIT buys Inglewood center
The San Diego-based Burnham Pacific Properties real estate investment trust purchased the 158,000-square-foot Crenshaw Imperial Shopping Center in Inglewood from an affiliate of Rubin-Pachulski Properties for about $9 million.
The center, anchored by a Ralphs supermarket and a Thrifty drug store, is 95 percent leased. Investment group Rubin-Pachulski bought the property a couple of years back when the outlook wasn’t so bright and acquisition capital was scarce.
Brokerage Madison Partners represented the seller, while San Diego stalwart Burnham Pacific negotiated in-house.
Readers will recall that the NYSE-traded Burnham REIT recently acquired two other local shopping centers in “underserved” L.A.-area neighborhoods and subsequently sold majority stakes to the new California Urban Investment Partners team headed by former L.A. Lakers superstar Earvin “Magic” Johnson, real estate investment adviser Victor MacFarlane and the California Public Employees’ Retirement System.
Those centers are the Margarita Plaza in Huntington Park and the Ladera Center in Ladera Heights. Perhaps Magic will engineer another “three-peat.”
Hawaii firm buys downtown tower
Another out-of-town buyer purchased a historic downtown L.A. office building last week a 1920s-vintage tower that served as Coast Federal Bank’s headquarters for a half-century.
Holualoa Realty Advisors, based in Hawaii and Arizona, bought the 12-story tower still known as the Coast Savings Building (the thrift maintains a branch there) at Ninth and Hill streets from an affiliate of Chicago investor Sam Zell’s Equity Office Properties.
The 140,000-square-foot property is just under 80 percent leased, primarily to various philanthropic institutions and tenants tied to the southern CBD area’s garment trade. Zell bought the property in the mid-1980s, and CoastFed soon thereafter relocated to the 1000 Wilshire tower in the heart of the financial district.
CB Commercial Real Estate Group’s Don Hudson and Mike O’Brien negotiated the sale for Equity Office, while Grubb & Ellis’ David Lachoff represented the buyer.
The price wasn’t disclosed, but downtown real estate sources estimated that the property probably fetched between $4.5 million and $5 million.
Delijanis buy building
Another older office tower was just acquired by a local group.
A limited liability company affiliated with the Delijani family’s Delson Investments Co. bought one of Beverly Hills’ first medical office buildings the 1959-vintage 9735 Wilshire tower.
Golden Triangle LLC is the actual entity that acquired the 68,000-square-foot building from Massachusetts Mutual Life Insurance Co.
No price was disclosed, but Beverly Hills real estate sources estimated that the Delijanis whose own office is next door at 9701 Wilshire paid between $8.5 million and $9 million for the half-vacant property.
That contrasts sharply with the $20 million the building fetched back in 1989 when the market was peaking.
Independent broker Jordan Weinberg negotiated for the buyer, while Mass Mutual’s Cornerstone Real Estate Advisers unit handled the sale in-house.