Old building hits new heights as office lofts
Location is key for mostly hidden structure with easy Capitol access
Sacramento Business Journal - April 20, 2007
by Michael Shaw
Staff writer
While AKT Development Corp. and developer Anthony Giannoni are working on plans for another office tower east of the Capitol, they have decided to restore the former Sacramento home of Pacific Bell, a nearby building that dates to the 1920s.
And the office lofts they're planning to put there are unique to downtown, brokers say.
Work began this week on the seven-story, horseshoe-shaped building known as 1414 K Street, which recalls an earlier era with its solid concrete construction and facade of brick, stone and touches of iron.
"We're trying to restore it to the grand, old building it was," Giannoni said.
He described a complete "gutting" of the 50,000-square-foot building that will reveal 12-foot-high ceilings for the first time in years. The ground floor has a cathedral ceiling 26 feet high. Most floors had been truncated by dropped ceilings that enclosed ductwork and lighting. Much of that mechanical apparatus is being rebuilt and the lofty space will be a selling point,.
When built, 1414 K enjoyed a prominent spot on a busy thoroughfare. But it has been dwarfed as the city has grown up around it. The building is tucked behind the Sacramento Convention Center on two sides and in the shadow of AKT's 12-story Meridian Plaza office tower on another.
But it's still got a lot going for it beyond a unique veneer, industry players said.
"It's a great location," said Carl Kowall, a longtime independent broker downtown who has sold a dozen office buildings. Most notably, the building is a short walk from the Capitol, making it prime space for lobbyists or organizations that want access. He said the high ceilings would be a draw.
"Parking would also be a key factor," in the property's marketability, Kowall said. "We all love our cars, despite the call for light rail."
Greg Levi, the broker at CB Richard Ellis who is marketing the property, said tenants would use a nearby parking structure until an underground lot is completed connecting the existing Meridian Plaza tower with another one planned for the same block.
Giannoni said he was surprised how many workers in Meridian bike to work each morning and use showers there.
Although it will be considered a quality Class B project when completed, tenants would have the same access as those in Meridian to Class A services, such as security and a gym. But rents would be below the Class A price, perhaps $2.50 to $2.60 a square foot, Levi said.
The gym and other amenities could be moved from the tower to the renovated building.
Former tenants already have vacated the building or will do so shortly, and new ones could be in by late January, Giannoni said. Developers discovered that the molds used to create the exterior features are still available at Gladding McBean LLC in Lincoln, if the firm decides it wants work done on the building's facade.
Kowall said visibility is also a factor potential tenants will consider. The building is tucked away from main thoroughfares.
"It's not about the visibility or view, it's about location," Levi said of the potential attraction of 1414 K. Tenants would be able to walk through the lobby of Meridian Plaza to get to the Capitol.
AKT, founded by Angelo K. Tsakopoulos, bought Meridian Plaza and land for another office building for $75 million in 2004. Giannoni has remained a partner in the Meridian project.
Giannoni said plans for the new office tower are still being reviewed. It's expected to be 23 stories high with nine levels of parking and 300,000 square feet of offices.
While some design elements might be similar to the first phase, city officials don't want twin buildings, Levi said.
Sacramento city spokeswoman Jill Scofield said there have been pre-application meetings with the developers. The city expects a formal application this summer.
Another office tower would further increase pressure on the downtown market, which already has David S. Taylor's new building going up at 621 Capitol Mall and another on the way at 500 Capitol, which is built by Tsakopoulos Investments, a company run by another branch of the family.
"I don't think we're super-saturated yet," Kowall said. "I think this town's growing up."
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Oh please..what the f'k is an "office loft"?
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