A prominent Bunker Hill high-rise has changed hands for a premium price topping $50 million, signaling that downtown Los Angeles' residential renaissance is boosting the area's long-soft commercial office market.
A Los Angeles investment group purchased the 15-story Chase Plaza at 888 W. 6th St. from a partnership that included the Somerset Group, a New York City real estate firm. The deal closed Thursday.
Phillip Sample, a real estate broker with CBRE Group who represented the seller and buyer, said the building sold for around $540 per square foot, a price that he estimated was the highest for a downtown office building in at least 10 years.
"Downtown is a very, very hot market," said Sample, who noted that investors want to be in the city center as millennials move downtown and the region's public transportation network expands.
That's a change from decades past as downtown L.A. grappled with persistent oversupply after a skyscraper building boom that began in the 1970s and stretched into the early 1990s.
In the second quarter, downtown had a vacancy rate of 16.9% and average rent of $3.27 per square foot, according to CBRE. That's a far cry from the drum-tight Westside, but an improvement from a year earlier when vacancy clocked in at 17.6% and rent was $2.99 a square foot.
The triangular glass Chase Plaza on the corner of 6th and Figueroa streets opened in 1974 — a time when Bunker Hill was being transformed into downtown's high-rise office center, following the demolition of the neighborhood's Victorian mansions.
Known then as Linder Plaza, for its owner and developer Max Linder, the building was decidedly smaller scale than its "50-and 60-story counterparts" nearby, The Times reported in 1974.
"It displays wit and grace in a part of town where Teutonic ponderousness has lately become architectural rule," The Times architecture critic John Pastier wrote.
That smaller size drove tremendous interest for the building when it was recently put on the market, Sample said. That size was attractive to smaller companies eager to buy into booming downtown.
Macy Lai, chief executive of the family investment group that purchased the property, said in a statement that the Lai family intends to hold the 105,000-square-foot tower for the long term.
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