Real Office Centers has pulled out of its 15-year lease for 27,000 square feet at Atlas Capital Group’s Row DTLA in downtown’s Industrial District, said Ron McElroy, the co-working company’s chief executive.
“We had a bit of a glitch with the landlord and we couldn’t resolve our differences,” he said.
The space, which is partially built-out, is back on the market, listed by CBRE Vice Chairman Jeff Pion. Marketing materials say “ownership will do a deal quickly with compelling and aggressive pricing.”
CBRE hasn’t listed the lease rate and didn’t provide how much ROC was paying. Asking rents in the Industrial District and nearby Arts District have been as high as $4 to $4.50 a square foot a month, according to brokers working in the market.
McElroy said ROC is still committed to having a presence in the area.
“We like the market. It’s just that we’ve had a hiccup,” he said.
Atlas confirmed that ROC defaulted on its lease.
Newport Beach-based ROC signed its lease in July with the option to take an additional 23,000 square feet at the 32-acre complex, which houses a produce market along with industrial buildings being converted into offices, shops, and restaurants.
This spring, fashion retailer J Brand and Latino media company MiTu are set to occupy 13,000 square feet and 29,000 square feet of office space, respectively.
The Arts and Industrial districts have several projects in development that will eventually offer about 2 million square feet of office space. Warner Music Group Corp. signed a long-term lease for Shorenstein Properties’ Ford Factory, which holds 257,000 square feet in the Arts District, but that high-profile deal has yet to kick off other corporate leases.
Editor’s note: This article has been updated to correct the title of Jeff Pion.