Downtown L.A.’s largest office landlord is holding onto one of its biggest tenants.
Maguire Properties Inc. has renewed and expanded its lease with law firm Sidley Austin LLP at the Gas Company Tower in deal that could be worth close to $90 million.
Sidley Austin, one of the 15 largest tenants in Maguire Properties’ portfolio, inked a 15-year lease for 186,000 square feet a 28,000 square foot expansion. The law firm will occupy six floors and part of another in the tower, located at 555 W. Fifth St. in downtown L.A.
Neither Sidley Austin nor Maguire Properties, the largest owner of Bunker Hill office properties, would disclose the value of the lease. However, at the average downtown L.A. asking rents of $2.70 a foot, the deal would be worth $90 million to Maguire Properties.
Maguire Properties approached Sidley Austin about renewing three years before the firm’s lease was set to expire. Rival landlords, most notably Thomas Properties Group Inc.’s City National Plaza, have recently stolen large tenants away from Maguire Properties.
Thomas Properties Group has been able to lure tenants to its 2.2-million-square-foot City National Plaza by offering low rents and high improvement budgets. The firm also offers free rent while the tenant is paying out the remainder of a lease at its previous location.
Maguire recently lost law firm Jones Day, which departed the Gas Company Tower and leased 160,000 square feet in Thomas Property Group’s building. To avoid a repeat with Sidley Austin, Maguire Properties locked the firm into a lease at current market rents that doesn’t take effect until 2009.
Peggy Moretti, Maguire Properties’ spokeswoman, said it’s not uncommon for the company to renew its larger tenants early.
“We’ve done that a number of times,” Moretti said. “It often makes sense for us to approach tenants and start negotiations in advance of their expiration.”
CB Richard Ellis Group Inc.’s Stephen Bay and Clay Hammerstein represented Sidley Austin. Peter Johnston and Josh Wrobel represented Maguire Properties.
