GlobeSt.com: What role do iconic office buildings like Emerald Plaza play in the era of redevelopment and creative office?

Givens: That's a good question. First and foremost, when you say iconic, in San Diego, to me that means they're noticeable; there's a history behind them and people know them, and they have history in the San Diego office market. Emerald Plaza is certainly at the top or near the top of that list, primarily because of its location in Downtown on the west side. The look of the building, its hexagonal structure, is very unique; its towers have been a part of newscasts, sports shows, articles, etc., for a long time.

As far as its position and where other iconic buildings fit as it relates to the new office buildings and the idea of converting buildings to creative office and appealing to the new workforce, I would fall back to 530 B St., which was built in the mid-'60s and at one time was the tallest building on the Downtown San Diego skyline. Also an iconic building, and it was very traditional—the lobby, the floorplates, the look and feel of it wasn't a lot different.

What we found in repositioning it was when we took the old and didn't change it, but embraced the classic images and combined it with the new features—fun, fitness, the freedom to work in various areas—it worked. We used bones of the building and added elements to fit the requirements of new tenants. 530B St. is a platform building—the first two floors have big floorplates, and it shrinks as you go up, so we built a sky terrace and a walking path with fire pits in the meeting area. It has been very well received and well utilized by tenants. As a follow-up to that, we were able to lease the space and attract the types of tenants that you wouldn't normally characterize as tenants that would go into traditional buildings. We were able to design their space to fit their new and modern requirements for their own talent retention, and that made for a nice fit.

That's what we see in Emerald Plaza, too. It's different in location, but similar to 530B with some consistent elements: we see built-in food and beverage at the bar and multiple gathering places within the building. We're looking to add amenities to some of the existing spaces to provide for tenants as they design their own spaces. They want to customize their space. We will also provide move-in-ready space for tenants who want a smaller space that will allow them to be up and running immediately. Other tenants want to put the design for their culture within their space themselves, and landlord can then provide similar features within the building environment as well.

GlobeSt.com: How are these iconic buildings changing to keep up shifting user demand while maintaining their status as iconic?

Givens: It varies from building to building, but across the board, landlords of these classic buildings are working really hard to provide amenities. It's basically an amenities race, so most landlords are working to provide things tenants want day in and day out. They're working to offer concierge services, fitness, gathering spaces, outdoor amenities, open-air environments. It doesn't really matter whether it's a brand-new, modern building in Carlsbad or a Downtown office building: landlords are getting a handle on what tenants want today; they want their environment at work to be more like a hotel or like home than the old traditional offices. So, with old, iconic buildings, landlords can use the bones and work within that framework to add elements that will attract the modern tenants today.

That's why we were so attracted to Emerald Plaza: its location close to the courts, its fabulous track record with lots of lawyers and financial tenants. There are a lot of tenants are already there in the building. It's the only true mixed-use office environment in Downtown San Diego, and we're glad to be able to piggyback on what the Westin provides and what amenities are already there at the building. Tenants can go downstairs after work and have a drink. It's a 24/7 environment. There's no concern over security like you get in other office buildings that go dark at night. Our hope was to build on that and work closer with the Westin to provide options for our office tenants, either fitness or ordering food for the office or shuttle services to the airport. We want to take advantage of that and be attractive to the modern tenant.

GlobeSt.com: How are owners of these buildings utilizing their iconic status in the market?

Givens: I definitely think an iconic status can be used to attract tenants. It's not a status thing, but more of the fact that people know it and have been aware of it for a long time. The history of the property is embraced, but then we will market the fact that we're taking the Emerald Plaza brand as people know it brand, but we're going to put the shine back on it.

GlobeSt.com: What else should our readers know about Emerald Plaza?

Givens: We have a unique blend of offerings at it relates to square footages and sizes we're going to be providing, from 2,500 square feet up to full floors of 16,000 square feet. There are different options: market-ready or shell condition allows tenants the flexibility to design their space out the way they want it. Also, there are a number of available suites that have exclusive outside patios that can be accessed outside the suite and provide a unique opportunity to build some interesting outdoor features that tie in with the tenant suites.

SAN DIEGO—Keeping the “bones” of an iconic office structure while adding services and interior amenities is one successful play for owners of long-standing office buildings, Kearny Real Estate SVP Jeff Givens tells GlobeSt.com. As we recently reported, Kearny and JV partner PCCP LLC have acquired the 364,000-square-foot office component of Emerald Plaza from Deutsche Bank in a transaction valued at $91.7 million.

Built in 1990 by local developer and entrepreneur Sandy Sharpery at a cost of $150 million, Emerald Plaza was the first, and continues to be one of the only true mixed-use developments in Downtown San Diego. The property includes a connected 436-room hotel now operated by Westin Hotel that was not part of the transaction.

The office complex at Emerald Plaza is characterized by its distinctive hexagonal towers ranging from 20 to 30 stories, making it one of the tallest buildings in San Diego. It is also one of the most recognizable on the San Diego skyline, especially in the evening, when the angled rooftops of the office buildings and hotel are illuminated, creating eight hexagonal green neon halos. The property, which has been owned by Deutsche Bank since 2005, was 70% leased at closing.
The property encompasses a full city block at 402 W. Broadway in Downtown's west side, an area that has historically outperformed the remainder of the Downtown office market, according to HFF, which marketed the property for sale.

Kearny has owned other iconic buildings in Downtown San Diego. As GlobeSt.com reported in March 2016, the firm sold Five Thirty B, a 232,936-square-foot office building at 530 B St., to Bosa Development for $53.2 million. The sale completed Kearny's business plan to reposition the former Union Bank headquarters to appeal to a variety of tenants and was one of the largest real estate transactions in Downtown San Diego in the previous 12 months.
We spoke with Givens about the Emerald Plaza acquisition and the place of iconic office buildings in the era of redevelopment and creative office.

GlobeSt.com: What role do iconic office buildings like Emerald Plaza play in the era of redevelopment and creative office?

Givens: That's a good question. First and foremost, when you say iconic, in San Diego, to me that means they're noticeable; there's a history behind them and people know them, and they have history in the San Diego office market. Emerald Plaza is certainly at the top or near the top of that list, primarily because of its location in Downtown on the west side. The look of the building, its hexagonal structure, is very unique; its towers have been a part of newscasts, sports shows, articles, etc., for a long time.

As far as its position and where other iconic buildings fit as it relates to the new office buildings and the idea of converting buildings to creative office and appealing to the new workforce, I would fall back to 530 B St., which was built in the mid-'60s and at one time was the tallest building on the Downtown San Diego skyline. Also an iconic building, and it was very traditional—the lobby, the floorplates, the look and feel of it wasn't a lot different.

What we found in repositioning it was when we took the old and didn't change it, but embraced the classic images and combined it with the new features—fun, fitness, the freedom to work in various areas—it worked. We used bones of the building and added elements to fit the requirements of new tenants. 530B St. is a platform building—the first two floors have big floorplates, and it shrinks as you go up, so we built a sky terrace and a walking path with fire pits in the meeting area. It has been very well received and well utilized by tenants. As a follow-up to that, we were able to lease the space and attract the types of tenants that you wouldn't normally characterize as tenants that would go into traditional buildings. We were able to design their space to fit their new and modern requirements for their own talent retention, and that made for a nice fit.

That's what we see in Emerald Plaza, too. It's different in location, but similar to 530B with some consistent elements: we see built-in food and beverage at the bar and multiple gathering places within the building. We're looking to add amenities to some of the existing spaces to provide for tenants as they design their own spaces. They want to customize their space. We will also provide move-in-ready space for tenants who want a smaller space that will allow them to be up and running immediately. Other tenants want to put the design for their culture within their space themselves, and landlord can then provide similar features within the building environment as well.

GlobeSt.com: How are these iconic buildings changing to keep up shifting user demand while maintaining their status as iconic?

Givens: It varies from building to building, but across the board, landlords of these classic buildings are working really hard to provide amenities. It's basically an amenities race, so most landlords are working to provide things tenants want day in and day out. They're working to offer concierge services, fitness, gathering spaces, outdoor amenities, open-air environments. It doesn't really matter whether it's a brand-new, modern building in Carlsbad or a Downtown office building: landlords are getting a handle on what tenants want today; they want their environment at work to be more like a hotel or like home than the old traditional offices. So, with old, iconic buildings, landlords can use the bones and work within that framework to add elements that will attract the modern tenants today.

That's why we were so attracted to Emerald Plaza: its location close to the courts, its fabulous track record with lots of lawyers and financial tenants. There are a lot of tenants are already there in the building. It's the only true mixed-use office environment in Downtown San Diego, and we're glad to be able to piggyback on what the Westin provides and what amenities are already there at the building. Tenants can go downstairs after work and have a drink. It's a 24/7 environment. There's no concern over security like you get in other office buildings that go dark at night. Our hope was to build on that and work closer with the Westin to provide options for our office tenants, either fitness or ordering food for the office or shuttle services to the airport. We want to take advantage of that and be attractive to the modern tenant.

GlobeSt.com: How are owners of these buildings utilizing their iconic status in the market?

Givens: I definitely think an iconic status can be used to attract tenants. It's not a status thing, but more of the fact that people know it and have been aware of it for a long time. The history of the property is embraced, but then we will market the fact that we're taking the Emerald Plaza brand as people know it brand, but we're going to put the shine back on it.

GlobeSt.com: What else should our readers know about Emerald Plaza?

Givens: We have a unique blend of offerings at it relates to square footages and sizes we're going to be providing, from 2,500 square feet up to full floors of 16,000 square feet. There are different options: market-ready or shell condition allows tenants the flexibility to design their space out the way they want it. Also, there are a number of available suites that have exclusive outside patios that can be accessed outside the suite and provide a unique opportunity to build some interesting outdoor features that tie in with the tenant suites.