Shannon adds that the caliber of the Rising group bodes well for the project’s success. “Nelson has a vision, and he clearly knows the story with his past involvement with MPG Properties. We’re excited to see him complete his vision for the asset. It’s going to be an interesting project, consistent with the demographic trends we’re seeing in the area.”

Pac Mutual, also known as Pacific Center, is located at 523 W. 6^th St., across the street from Pershing Square and adjacent to the historic Biltmore Hotel. The center consists of 424,598 square feet in three buildings, built in the Beaux-Arts tradition and connected by interior passageways through the first six floors. The three buildings include a six-story office building built in 1908, a 12-story office building built in 1921 and a four-story office building built in 1926.

Designed by architects John Parkinson and Edwin Bergstrom, the complex was originally built for the Pacific Mutual Life Insurance Co. as its headquarters. Current tenants include American Business Bank, architecture firm NBBJ, online retailer Nasty Gal Inc., CuySteinberg Architects and environmental consultant Camp Dresser & McKee; ground-floor retail includes the recently renovated restaurant Water Grill. The building is currently 70% leased.

“We’ve been observing a historic shift in how people use office space,” says Nelson Rising. “Tenants are seeking work spaces that fit their business and professional lifestyles. They are looking for an ‘experience.’ Pac Mutual offers all of that and more.”

RRP teamed with Mount Kellett to acquire Pac Mutual because of its strong asset value, premium location, unique historic design, street-facing retail, below-grade parking and the potential for larger floor plans. “We’re happy to be working on Pac Mutual with RRP as our management and acquisitions partner, given their strong track record and the quality of this asset,” says Andrew Axelrod of Mount Kellett.

RRP is repositioning Pac Mutual to appeal to a variety of downtown Los Angeles office users and has engaged Santa Monica-based real estate services firm Industry LTD to work with the firm on the building’s transformation. Industry Partners, an affiliate of Industry LTD, will manage the leasing and marketing effort and will establish a downtown L.A. office in Pac Mutual under the direction of Carle Pierose, who will be responsible for leasing, and Tom Majich, who will be in charge of construction management.

“We are seeing the boundaries of the creative office market shifting east,” says Jim Jacobsen, founder of Industry Partners. “With little or no space available in Santa Monica for creative users with a requirement of 10,000 square feet, downtown Los Angeles is becoming a more attractive alternative. Downtown L.A. has done a wonderful job in reinventing itself with more loft-style housing and an infrastructure of entertainment and services to support it, and as a result is attracting a new breed of office user.”

The RRP lease-up strategy will benefit from improving market conditions in the heart of the city. Downtown L.A. has attracted over 500,000 square feet of tenants from the west side and other areas in the last two years. As regional access to the area improves and housing options become more available in the downtown area, this trend is expected to continue.

“We’re seeing something happening that’s been talked about for the last 20 years,” Christopher Rising tells GlobeSt.com. “There’s a real community down here—there are more people down here than in Lower Manhattan—and there’s such history to these buildings.”

Rising explains that during the 1980s an attempt was made to change the buildings so they would resemble some of the class-A buildings that were being constructed at that time. “This was a mistake because what was missed was the history and character of it. Office users want to have more than just some office they go to, and part of that is a demand for authenticity. They don’t want a space that’s been manufactured to try to be hip or cool. They really want a restoration of terrific office environment that meets their social and cultural needs. We felt we could offer those things on a scale that downtown hasn’t seen.”

Rising also says that the building was designed to have 14-foot ceilings, and real brick exists behind the drywall. “What’s amazing as we’ve been doing our demolition is that they actually painted over windows so you couldn’t see the drop ceilings. Now we are revealing the big, dramatic windows and real brick that people appreciate.”

Jacobsen tells GlobeSt.com that the renovation’s big push will take place in 2012, involving common corridors, the building’s exterior and all of the vacancies, and that projected construction costs are above $10 million. “We’re trying to bring a little of the West Side creative space to downtown L.A., like the Lantana Center and Blackwelder, with a combination of prebuilt creative spaces as well as build-to-suit for tenants. We’re really getting back to the original core of the building.”

Timing is key, and now is a great time to buy in this market, Rising tells GlobeSt.com. “Downtown is moving out of its infancy, and people are saying, ‘This is where we want to be.’ This is where young architects want to live and work. The authenticity of it makes us believe we’re going to lease it at good rates.”

Rising adds that RRP plans to rebrand each of the three buildings and give them each their own identity. While he could not comment on the purchase price, he did say that RRP acquired a loan for the purchase from Bank of America, with whom it has an excellent relationship. Nicholas D. White of Preferred Capital Advisors tells GlobeSt.com that the BofA debt was arranged by Scott Eschelman and himself of the firm's Los Angeles office and Craig Zarro and Dak Digerness of the firm's Northern California office.

GlobeSt.com also has recently heard reports that RRP is considering purchasing 500 Orange Tower, a 281,699-square-foot office property in Orange County that is reportedly on the block for $195 to $200 per square foot. Rising could not comment on whether or not the reports were accurate except to confirm that RRP has been in ongoing discussions about the property and other Orange County buildings. “These are great buildings, and we try to buy great buildings that have not been loved very much. They’re wonderful buildings, and if we could buy them, we would love to own them.”