The deal will provide Oaktree Capital Management, which already occupies 75,000 sf at Wells Fargo Center, with an additional 25,000 sf. The high-rise stands at 333 S. Grand Ave. in the Bunker Hill area.
The lease expansion runs through April 2009 and is valued at about $5.4 million. Oaktree Capital was represented by Stephen L. Bay and Clay Hammerstein, a brokerage team in the Downtown office of Insignia/ESG that has handled several other Oaktree-related deals in the past. The building's owner, Downtown-based Maguire Partners, was represented in-house by Josh Wrobel and Tony Morales.
Oaktree Capital has been involved in several high-profile investments over the past several months. Just a few weeks ago, it became a minority partner in the venerable but bankrupt Edwards Theatres chain of movie houses by helping Denver billionaire Philip F. Anschutz take control of the Newport Beach-based chain through a deal involving more than $250 million in cash, debt and stock.
Oaktree Capital's new lease also reflects the growing confidence that tenants and investors alike have in Downtown LA, an office market that suffered throughout the 1990s as many high-profile companies moved to the trendier Westside or merged with even larger firms and disappeared altogether. Cushman & Wakefield reported earlier this month that the third-quarter vacancy factor in the CBD fell to 15.8%, from 17% at midyear and more than 20% in third quarter 2000.
The third-quarter reading was the lowest in 10 years, the C&W report adds. Brokers say many office users are choosing to expand or relocate Downtown because rents in the area are still as much as 30% less than those charged at some Westside buildings–though the gap has been narrowing as vacancies in the CBD keep dropping.
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