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Sunday, Jun 26, 2022

Apartment Project Moves Into Downtown L.A.

Filling downtown L.A.’s demand for more apartment space, a Bunker Hill complex is about to break ground. The debut of construction marks the first new apartment project in the neighborhood in more than a decade.

Developer Geoffrey H. Palmer, who has built a number of downtown apartment complexes, including the Italian-style Orsini, closed this month on a $106 million construction loan to build a 526-unit complex known as the Da Vinci at 909 W. Temple St.

U.S. Bank committed $56 million of the loan and was the lead arranger for the balance.

With financing in place, construction of the Da Vinci is scheduled to begin early next year and end in 2014. It will have units ranging from studios to three bedrooms, with projected rents beginning around $2,400. Amenities will include two outdoor swimming pools, an indoor basketball court and a media room.

The project includes a four-story parking structure with more than 1,000 spaces. It also will include 14,000 square feet for ground-floor shops.

“This much needed housing complex is a big win for the downtown Los Angeles community,” Palmer said in a statement.

The current 30,000 apartments and condos in the downtown area aren’t enough to keep up with demand, said Adam Tischer, vice president of Colliers International downtown. The ratio of residential units to the daytime working population in mature stable markets is about 15 percent. In downtown L.A., that ratio is just under 6 percent.

“Even if you were to double the housing stock, it still wouldn’t be on par with a stable market,” he said. “Downtown can easily absorb many more residential units in addition to what’s already being built.”

Rudy Kramer, market manager for commercial real estate at U.S. Bank in Los Angeles, said his company is “thrilled to get behind this exciting new development.”

Palmer is also under way on a 913-unit housing complex known as the Lorenzo for USC students. The first phase of that project should be completed in the spring. He received financing from U.S. Bank on that project as well.

Steep Sale

A San Pedro office tower has traded hands for $22 million in one of the top-dollar deals in the South Bay this year, sources told the Business Journal.

Newport Beach private investment firm Jupiter Holdings LLC bought Pacific Place, an 11-story office tower at 222 W. Sixth St., from Pacific Place Associates LP in San Pedro.

Pacific Place was built in 1990 for defense computer company Logicon Inc., which was later acquired by Northrop Grumman Corp. Today, the building is near San Pedro’s high-profile Downtown Harbor expansion project and the Ports O’ Call redevelopment project, which will total 375,000 square feet of retail and tourism-related space.

The 292,540-square-foot Pacific Place was 29 percent occupied when it was sold, but still garnered an impressive price. The only buildings to command higher sale prices in the area were Pacific Center for $52 million and Hamilton Place for $34 million, both in Torrance.

Kevin Shannon, vice chairman of CBRE Group Inc. who represented Pacific Place Associates in the deal, said that the building has a lot of selling points.

“There is major upside potential for this asset given its proximity to both ports, its views of the Pacific Ocean, its easy access to both the 110 and 405 freeways, and the continued amenity improvements to the area,” he said.

CBRE’s Dave Smith, senior vice president, and Scott Schumacher, first vice president, also represented the seller.

More Creative Space

A Culver City office complex is getting a $60 million transformation into creative space after its owner received new financing.

The complex, at 8550 Higuera St., 8600 Hayden Place and 3466 Eastham Drive, is owned by Westwood’s Hackman Capital Partners LLC, which bought it in 2007 with a $20.2 million loan. The company for several months has been in negotiations with Deutsche Bank to get new financing.

Hackman recently secured a construction loan from the bank and plans to convert the traditional offices into a 126,400-square-foot complex with a 556-space parking structure to attract tech and entertainment companies. The buildings will include two-level, loft-style offices with concrete floors, exposed steel beams and factory windows.

Tech-focused advertising firm Steelhouse Inc. has already signed a lease for the 17,800-square-foot Eastham building. Hackman is seeking tenants for the other buildings.

“Our job here is to create space where employees want to be,” said Chief Executive Michael Hackman. “Creative office space is not a fad; it’s a real paradigm shift.”

Staff reporter Jacquelyn Ryan can be reached at jryan@labusinessjournal.com or (323) 549-5225, ext. 228.

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