By Scott Baltic, Contributing Editor
George Smith Partners and Dekel Capital have co-brokered $122 million in joint venture equity and non-recourse bridge financing for Urban Offerings Inc. and ESI Ventures, which will use the proceeds to develop a two-building, 250,000-square-foot Class A “creative office campus” in downtown Los Angeles’ Fashion District.
The financing will both recapitalize the developers’ ongoing renovations on the Norton Building, a five-story, approximately 100,000-square-foot office property at 755 S. Los Angeles Ave. (at 8th Street), and the acquisition and repositioning of the Deardens Building, a four-story, approximately 140,000-square-foot property on South Main Street at 7th Street. The former was completed in 1914, while the latter was built as a department store in 1904.
The project is as yet unnamed, and no dollar value has been released, a Dekel Capital spokesperson told Commercial Property Executive. The two buildings occupy diagonally opposite corners of the same city block, and “a related ownership owns two of the parking lots in between,” the spokesperson said.
The site is on the border between the Fashion District and the Historic Core, where, according to GSP and Dekel, multiple residential high-rise towers are under way, but there’s a lack of quality options for office tenants. The properties are surrounded by boutique shopping and upscale restaurants and are walkable to the entertainment options along the Broadway District and LA Live.
“The project offers a rare opportunity to access historic properties with larger floorplates and high ceilings that are in high demand from national tenants that are looking to be part of the burgeoning downtown creative ecosystem,” Shlomi Ronen, managing partner of Dekel Capital, said in a prepared statement.
“The Historic Core and Fashion District area of Downtown Los Angeles is truly going through a modern-day renaissance. From the redevelopment of historic buildings to hotels, multifamily and creative office, the area is attracting the energy and momentum that initially brought the earliest of settlers to the city of Los Angeles,” added Malcolm Davies, principal/director at George Smith Partners.
A niche product trending?
Sometimes associated with greater New York City, the creative office product subtype is making inroads into LA. For example, last July Newcastle Partners and Westport Capital Partners acquired a two-story building at 5830 Rodeo Road, in the Jefferson Corridor submarket. The 40,000-square-foot building had been an antique showroom and warehouse and will be repositioned as creative office space.
And in September, Luzzatto Co. began construction on Expo Station, an 80,000-square-foot creative office in West L.A. The transit-oriented project will feature two levels of parking, three stories of creative office space and more than 16,000 square feet of outdoor patio areas.
Image courtesy of Urban Offerings