Terms of the 10-year deal will provide Jeffer, Mangels, Butler & Marmaro LLP with 90,000 sf at Divco West Properties' 1900 Avenue of the Stars high-rise complex near Santa Monica Boulevard. The firm will take four floors of the 28-story project, pushing the tower's occupancy to nearly 100%.
Though none of the principals or brokers directly involved in the lease will disclose its financials terms, other commercial real estate pros say the deal is valued at around $35 million to $40 million. While that's enough to make the transaction one of the largest in Century City this year, it's also much less than Jeffer Mangels would pay to renew its lease at Fox Plaza—and a sign that even some of LA's top-notch tenants are looking for ways to save money on space while the future of the economy remains cloudy.
Brokers say the deal is also significant because Jeffer Mangels was one of the first tenants at Fox Plaza, which was undisputedly LA's most prestigious high-rise when it opened in the 1980s and still commands some of the highest rents in Southern California. Its owner, Irvine Co., is asking as much as $60 psf a year for space on some of its upper floors.
However, rents in Century City and the rest of the Westside have been softening for the past few quarters. The downturn started when the submarket's key dot-com tenant base began to erode, and has continued as the overall economy slipped into recession.
With profits down, even tenants on the status-conscious Westside have begun taking a harder look at their rent and other overhead costs. While the trend has hurt occupancy at Fox Plaza and some other trophy properties, it has benefited owners of complexes like 1900 Avenue of the Stars—a class A property to be sure, but without the double-digit premiums attached by trophy owners.
Jeffer Mangels is one of the region's most powerful and successful law firms. It is perhaps best known in the nation's real estate circles for its expertise in the hospitality industry.
A Travers Realty Corp. team of Jim Travers and Jeff Mintz, aided by Jeffer Mangels partner Keith Elkins, represented the law firm in the lease negations. Jeff Pion of CB Richard Ellis and San Jose-based Divco West's Sam Nicassio and John Moe represented the owner.
Want to continue reading?
Become a Free ALM Digital Reader.
Once you are an ALM Digital Member, you’ll receive:
- Breaking commercial real estate news and analysis, on-site and via our newsletters and custom alerts
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical coverage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
*May exclude premium content© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
