LOS ANGELES | Downtown Project Rundown 6.0

[craigs]

Los Angeles office skyscraper faces foreclosure sale


The Gas Company Tower in downtown L.A. was considered one of the city’s most prestigious office buildings when it was completed in 1991. In recent years the office market has turned against landlords. (Myung J. Chun / Los Angeles Times)

Roger Vincent
Los Angeles Times
March 28, 2024

Gas Company Tower, a prominent office skyscraper in downtown Los Angeles, faces foreclosure as landlords continue to struggle to keep tenants in their buildings.

A notice of trustee’s sale for the high-rise on Bunker Hill was filed March 21 with the Los Angeles County Registrar-Recorder/County Clerk, setting the stage for a foreclosure sale as soon as 90 days after the filing.

The sale may complicate plans by the city of Los Angeles to lease more than 300,000 square feet in the building. The city has been negotiating with the receiver in control of the property for months to sign what would be one of the region’s largest office leases of the year if it is approved by the City Council.

. . . .

[scania]

Originally Posted by craigs

Los Angeles office skyscraper faces foreclosure sale


The Gas Company Tower in downtown L.A. was considered one of the city’s most prestigious office buildings when it was completed in 1991. In recent years the office market has turned against landlords. (Myung J. Chun / Los Angeles Times)

Roger Vincent
Los Angeles Times
March 28, 2024

Gas Company Tower, a prominent office skyscraper in downtown Los Angeles, faces foreclosure as landlords continue to struggle to keep tenants in their buildings.

A notice of trustee’s sale for the high-rise on Bunker Hill was filed March 21 with the Los Angeles County Registrar-Recorder/County Clerk, setting the stage for a foreclosure sale as soon as 90 days after the filing.

The sale may complicate plans by the city of Los Angeles to lease more than 300,000 square feet in the building. The city has been negotiating with the receiver in control of the property for months to sign what would be one of the region’s largest office leases of the year if it is approved by the City Council.

. . . .

The Gas Company has been building a new office in the Pico Rivera area of Los Angeles. One of the last departments that’s in the Gas Company Tower will be moving there next year. I believe there will be no more SoCal Gas employees left there.

[LAsam]

Total bloodbath right now in the downtown office market. $465 million in debt on the Gas Company Tower and it's estimated to be valued at roughly $200 million in the current market. Appraised for $632 million in 2020.

[craigs]

Originally Posted by LAsam

Total bloodbath right now in the downtown office market. $465 million in debt on the Gas Company Tower and it's estimated to be valued at roughly $200 million in the current market. Appraised for $632 million in 2020.

Remember, though, that the article took the average value and just applied it to the Gas Company Tower. Now, I don't know the condition of the offices in the building. And all commercial real estate right now is indeed in a deep downcycle. But I still think the Gas Company Tower is likely worth more than the average office building in DTLA.

[scania]

Originally Posted by craigs

Remember, though, that the article took the average value and just applied it to the Gas Company Tower. Now, I don't know the condition of the offices in the building. And all commercial real estate right now is indeed in a deep downcycle. But I still think the Gas Company Tower is likely worth more than the average office building in DTLA.

This is true!!!! But what downtown market in a MAJOR city that’s doing better than pre-Covid era. Enough with it…you say more about yourself when harping on such ideas about DTLA. And I’m not talking about you Craig’s.

[FromSD]

The Gas Company Tower has always been one of my favorite skyscrapers in Downtown LA. The late ‘80s and early ‘90s were really a fantastic period for LA skyscraper development.

[craigs]

Originally Posted by FromSD

The Gas Company Tower has always been one of my favorite skyscrapers in Downtown LA. The late ‘80s and early ‘90s were really a fantastic period for LA skyscraper development.

Agreed, Skidmore, Owings, and Merrill did a great job giving us an interesting and refined tower.

[ocman]

Originally Posted by Illithid Dude

Great news about the Broad. I couldn't help thinking how small and minor the museum felt when I was there last.

What’s also interesting is that the NYT reported that The Broad’s endowment is at $1B. This is news because it was previously thought that it was $200M. This also significant, because it puts it on the list of one of the handful of US museums with billion dollar endowments.

[headcheckjj]

Originally Posted by ocman

What’s also interesting is that the NYT reported that The Broad’s endowment is at $1B. This is news because it was previously thought that it was $200M. This also significant, because it puts it on the list of one of the handful of US museums with billion dollar endowments.

I assume Broad left it an additional sum when he died? Then again, if the endowment is managed by a wealth manager, they probably made significant gains in the stock market over the last few years.

[milquetoast]

Originally Posted by colemonkee

Man, this picture makes me pine for the

Studio Gang-designed hotel for Chinatown.

Does a Chicago firm know how to design for earthquakes?
The design is wonderful, if not feasible for the zone.
Also, the Alloy Tower almost completely blocks the view
of downtown when entering from the 6th Street Viaduct.

[MAC123]

Huh? What does them being based in Chicago have to do with anything? Architecture firms design buildings everywhere

[LAsam]

Originally Posted by craigs

Remember, though, that the article took the average value and just applied it to the Gas Company Tower. Now, I don't know the condition of the offices in the building. And all commercial real estate right now is indeed in a deep downcycle. But I still think the Gas Company Tower is likely worth more than the average office building in DTLA.

Brookfield is selling 777 Fig for roughly $145/sf and AON Center sold for $134/sf so there is some evidence to back the pricing:

https://therealdeal.com/la/2024/03/2...dtla-for-145m/

I would be surprised if Gas Company Tower does better than $145/sf, but hopefully it does!

[colemonkee]

Short answer is yes. This is why have structural engineers either hired or on staff to ensure buildings meet local building codes. Studio Gang is an internationally recognized firm and being based in Chicago does not mean they only design for the specific geological conditions in Chicago.

Originally Posted by milquetoast

Does a Chicago firm know how to design for earthquakes?
The design is wonderful, if not feasible for the zone.
Also, the Alloy Tower almost completely blocks the view
of downtown when entering from the 6th Street Viaduct.

[citywatch]

• Video Link

]In October 2023, vintage veteran Brian Lee decided to open a store. The brains behind the “livestock vintage” Instagram account Harvester International moved his substantial collection of menswear out of the kitted-out front room of his Boyle Heights apartment—which was necessarily appointment-only since he also lives there—and into an expansive storefront at Row DTLA. And Lee is not alone—his Harvester International storefront is part of a rising cohort of companies that has helped turn Row DTLA into a new hub for vintage shopping in LA.

“Initially, I started selling vintage denim out of the back of my truck, and that’s actually where I got the name Harvester—the truck is an International Harvester Scout,” Lee said from his perch at his sunny, still-new showroom in downtown LA. “At that point, I was selling at various markets and fleas out of my truck, but there was still an element of the face-to-face interaction that only a brick-and–mortar storefront really provides that was missing.”

Lee wasn’t the only one easily convinced to set up shop there. The Row, which was built in the early 1920s and initially designed by famed local architect John Parkinson as a wholesale and produce market at the terminus of the Southern Pacific Railroad, has become a haven for vintage enthusiasts. The 30-acre campus is laid out in a warehouse-dense section of the Arts District, and it’s defined by its towering 85-foot concrete buildings, which are broken up by equally massive, multi-paned windows. At one point, it was the world’s second-largest wholesale produce market; in the 2000s, it was the factory and headquarters of American Apparel.

The complex struggled to find its identity after the pandemic pushed so many retailers online and offices remote, and for a long time, the wide streets and giant parking garage felt too quiet, almost post-apocalyptic. But the recent influx of thrifting and menswear collectors like Lee has helped define an exciting, growing scene. With concrete walls, high ceilings, and a well-worn feel (the buildings were constructed in the 1920s), these rooms are the perfect canvas for a vintage lover to personalize and showcase their own aesthetic.

While both A Current Affair and Pickwick Vintage are sprawling fairs that highlight the wares of other LA thrifting obsessives, Arcade is a tightly curated storefront that showcases the best of Wainwright’s discoveries in what he considers the vintage capital of the world. “In terms of vintage shopping, no other city comes close [to LA],” he said. “We just have such a deep resource of goods. I don’t know if it’s because of the entertainment industry or so many people living out their dreams here, but I don’t find the shopping in any other city as fruitful or as satisfying.”

“Being here alongside Arcade and Tried and True, we occupy different lanes in vintage, but there’s enough of an overlap in terms of execution and customer base that it just makes sense,” Lee said. “Plus, The Row offers a level of support that you’re not going to find just opening up shop on some random street in Los Angeles. It truly does feel like a community of small businesses.”

[craigs]

A short blurb from today's Los Angeles Times recapping what is happening in Skid Row:

Nonprofit providers are building homeless housing high-rises. The Weingart Center is changing the look and feel of Skid Row with three new homeless housing developments currently under construction. These buildings — 12, 17 and 19 stories — will be among the tallest in the area and house 700 people in studios and one-bedrooms. The first is set to open this spring. The AIDS Healthcare Foundation is planning a 216-unit, 15-story building of its own in Skid Row.

A $2-billion project could bring thousands of higher-income residents to Skid Row. Denver-based developers Continuum Partners are proposing a massive $2-billion development on the northeast border of Skid Row next to Little Tokyo and the Arts District. If the City Council approves it, the project will bring 1,500 new homes, 410,000 square feet of office space, a 68-room hotel and retail restaurant space. Gov. Gavin Newsom has endorsed it.

The developer is conspicuously leaving Skid Row out of the marketing for the project, referring to the effort instead as “the New Gateway to DTLA.”

All together, it’s likely that five years from now, Skid Row will look vastly different than it does today. . . .

[LA21st]

Originally Posted by craigs

A short blurb from today's Los Angeles Times recapping what is happening in Skid Row:

Nonprofit providers are building homeless housing high-rises. The Weingart Center is changing the look and feel of Skid Row with three new homeless housing developments currently under construction. These buildings — 12, 17 and 19 stories — will be among the tallest in the area and house 700 people in studios and one-bedrooms. The first is set to open this spring. The AIDS Healthcare Foundation is planning a 216-unit, 15-story building of its own in Skid Row.

A $2-billion project could bring thousands of higher-income residents to Skid Row. Denver-based developers Continuum Partners are proposing a massive $2-billion development on the northeast border of Skid Row next to Little Tokyo and the Arts District. If the City Council approves it, the project will bring 1,500 new homes, 410,000 square feet of office space, a 68-room hotel and retail restaurant space. Gov. Gavin Newsom has endorsed it.

The developer is conspicuously leaving Skid Row out of the marketing for the project, referring to the effort instead as “the New Gateway to DTLA.”

All together, it’s likely that five years from now, Skid Row will look vastly different than it does today. . . .

Wait, there's 3 buildings u/c in that area right now?
I thought it was 1.
And a 4th is coming? Thats great.
Probably more after this.

Wouldnt that be funny if Skid Row develops its own 15-20 story cluster?
Its badly needed of course, but that would change the area.

Why cant LA rezone that dumb light industrial district to the southeast for more highrises like this? Let Commerce get industrial stuff. Who cares.

Yea, by the time the Olympics comes around, LA might not have to "clean" up Skid Row as much, as these newer buildings will take care of some.

[craigs]

Originally Posted by LA21st

Wait, there's 3 buildings u/c in that area right now?

As I understand it, the first tower is topped out but they are still getting it ready for its "spring" opening, which means within the next three months or so. The second tower is definitely u/c, and I don't know about the third.

Why cant LA rezone that dumb light industrial district to the southeast for more highrises like this? Let Commerce get industrial stuff. Who cares.

LA is the #1 manufacturing city in the US, and downtown is the center of the transportation network, so I don't mind the downtown-adjacent industrial belt. That said, when existing industrial properties go up for sale in those areas, other uses should be allowed on a case-by-case basis.

[SoCalKid]

Originally Posted by LAsam

Brookfield is selling 777 Fig for roughly $145/sf and AON Center sold for $134/sf so there is some evidence to back the pricing:

https://therealdeal.com/la/2024/03/2...dtla-for-145m/

I would be surprised if Gas Company Tower does better than $145/sf, but hopefully it does!

Agreed with this take on valuations. It's pretty unfortunate where values are downtown. Not to mention 888 S Hope which just sold for $350k/unit recently. It would cost north of $750k/unit to build that today. Which means we're not going to get any new towers built by market-based groups for a while (that excludes groups like Onni). Hell, it costs north of $500k/unit just to build a podium project. So things aren't looking good for new multifamily projects. The good news is that markets change and often pretty quickly. So things could easily turn around in a few years. I think downtown stakeholders should focus on safety (and safety perception), cleanliness, and attracting events, visitors, and more restaurant and retail openings. Those things in turn will lead to increased utilization of office towers and higher valuations for multifamily, which in turn will mean more development.

[LA21st]

Originally Posted by craigs

As I understand it, the first tower is topped out but they are still getting it ready for its "spring" opening, which means within the next three months or so. The second tower is definitely u/c, and I don't know about the third.


LA is the #1 manufacturing city in the US, and downtown is the center of the transportation network, so I don't mind the downtown-adjacent industrial belt. That said, when existing industrial properties go up for sale in those areas, other uses should be allowed on a case-by-case basis.

Industrial shouldnt be in that freeway loop. Outside in south LA or something? Sure.

Chicago's west loop is getting the light industrial out of there, LA can too. Its just not necessary in a housing crisis. There arent nimbys in the that industrial zone. Build it up.

[LAsam]

Originally Posted by SoCalKid

I think downtown stakeholders should focus on safety (and safety perception), cleanliness, and attracting events, visitors, and more restaurant and retail openings. Those things in turn will lead to increased utilization of office towers and higher valuations for multifamily, which in turn will mean more development.

100% agree with this. Some of the depressed RE value downtown is due to market forces and beyond control. Some is due to safety and cleanliness issues and can be addressed.