RECOL/28inches/1stjc/mark2nd
OK, OK you’ve been hearing about downtown’s promised rebound since it started its slide into the real estate abyss years ago.
But now, people are starting to back up the talk with hard cash. Case in point: Essex Property Trust Inc. last week closed its purchase of the Bunker Hill Towers apartments, a 456-unit complex located at 222 and 234 South Figueroa St.
Essex, a Palo Alto-based real estate investment trust, paid $36.5 million for the 19-story, two-tower property it bought from Brilliant Future Inc., a Hong Kong investment company. Brilliant Future has owned the property since 1990 and undertook a substantial renovation last year.
This deal is Essex’s first foray into the urban market. Essex, which is concentrated in multifamily properties on the West Coast, typically buys garden-style apartment complexes in suburban areas. It became interested in downtown L.A. as an emerging market when it was conducting its due diligence on possible buys in the surrounding suburbs, said Wendy Carhart, an Essex spokeswoman.
“L.A. is really one of the last major American cities that isn’t a 24-hour town,” she said. But with the recent groundbreaking on the new Staples Center sports arena, she said, there’s an “influx of capital and enthusiasm prepared to change that.”
The same reasoning propelled two local chefs to locate their new restaurant downtown. The owners of the Border Grill in Santa Monica just signed a 20-year, 9,000-square-foot lease at 445 S. Figueroa St., outside the Union Bank Plaza tower. The two restaurateurs, Mary Sue Milliken and Susan Feniger, plan to open a restaurant specializing in Latin-inspired cuisine called Ciudad (Spanish for “city”). The establishment should open this September.
The partners, who have a program on the cable television Food Network, chose downtown because it offers a strong lunch crowd as well as the promise of a strong night and weekend business once the arena opens, said Martha Wright, a spokeswoman for the partners.
The ambiance of their new restaurant is “going to be the kind of place where people in suits will feel comfortable, though it will make them want to loosen their ties,” Wright said.
They aren’t the only ones with eyes on downtown. TrizecHahn Corp., which purchased the Citicorp Center office tower and the adjoining Seventh Marketplace shopping mall one year ago, is in the process of repositioning the center to attract more restaurants and sports bars.
The firm hired the architectural firm RTKL Associates Inc., which designed the Irvine Spectrum entertainment-retail complex in Orange County, to renovate the 350,000-square-foot mall. TrizecHahn has not yet decided on a budget for the renovation, according to Patrick Lacey, general manager for the mall. But he said the firm is already in negotiations with several national “eater-tainment” restaurants, which he declined to name.
The mall is just three blocks from the new arena, so it is adjusting its tenant base in hopes of appealing to people who will be downtown to see the Lakers, Kings or other events at Staples Center.
The mall is 60 percent leased, a figure that is skewed because Bullock’s closed its 120,000-square-foot store, Lacey said.
The owners of the 10-story 800 S. Hope St. office building are hoping to cash in on downtown’s rebound as well. Donaldson, Lufkin and Jenrette Corp, which bought the building for $5.5 million a few years ago, is looking to sell it for about $12 million. The sale of the 200,000-square-foot building is being handled by Todd Doney at Cushman Realty Corp.
And in another bit of downtown news, Deloitte & Touche LLP has selected 2 California Plaza as its new office. The consulting firm, which currently occupies 150,000 square feet in the 1000 Wilshire building, is in the process of hammering out a lease that could possibly be as large as 320,000 square feet.
Officials at the firm, as well as their representatives Steve Bay, Gary Weiss and John Ghiselli, at Julien J. Studley Inc. declined to discuss the lease negotiations.
Long Beach lease
Another lagging office market, downtown Long Beach, just landed a new tenant. CIM Vision International signed a five-year, 30,000-square-foot lease at the Arco Center building, 300 Oceangate. The software developer is moving from its 7,000-square-foot home at the Del Amo Office Center in Torrance.
Jeff Kirshner of CIM said his firm chose Long Beach because of its proximity to the Orange County labor pool. Dave Mackenback of Cushman & Wakefield Inc. represented both the tenant and the landlord in the transaction.
Westwood Village
The public hearing phase of developer Ira Smedra’s controversial Village Center Westwood project has concluded and the project is scheduled to go before the Planning Commission on April 23.
If approved, the $100 million entertainment-retail project will then go to the City Council’s planning committee. City officials think it will likely go before the full council in late summer.
The 417,000-square-foot project includes 3,400 theater seats and a supermarket. Many residents oppose the project, saying it would draw too much traffic, but developers have organized supporting residents and businesses to blunt the opposition.
Councilman Mike Feuer, who represents that district, is also backing the project which means it will likely be approved in the end, although Smedra may be forced to make more concessions.
Didion’s heir?
Just weeks after fellow former Koll Real Estate Services exec Jana Turner was promoted to head up the merged property management operation at CB Commercial Real Estate Group Inc., Ray Wirta has been named COO of the Los Angeles-based company, positioning him as the heir apparent to CEO Jim Didion.
Wirta, formerly a top lieutenant of Newport Beach-based developer Don Koll and his Koll Co., adds the COO duties while maintaining his position as president of the company’s financial services division, the advisory and banking arm of CB.
The promotion of Wirta is designed to free up Didion to focus on CB Commercial’s growing international aspirations, said Cary Brazeman, spokesman for CB Commercial. The company is trying to complete an acquisition of a British brokerage company and has plans for further expansion in Europe.
Although formal confirmation by the board of directors won’t take place until the May meeting, it is considered a given, and Wirta is already taking on more duties.
Joyzelle Davis covers the real estate industry for the Los Angeles Business Journal. Nidal M. Ibrahim of the Orange County Business Journal contributed.
