A huge former department store on Broadway in downtown Los Angeles is being sold to a New York real estate investment firm that intends to pump new life into the old building and its rebounding neighborhood.
The century-old flagship of the May Co. contains 1.1 million square feet of space surrounded by Broadway, Hill Street and 8th Street. The commercial district was once one of the best in the Southern California, but fell on hard times in the late decades of the 20th century.
Waterbridge Capital has agreed to buy the property now known as Broadway Trade Center, city officials and property brokers said. The price was not disclosed, but experts familiar with the downtown real estate market expect the property to garner $115 million to $130 million.
The Beaux-Arts-style building owned by Beverly Hills investors is probably too big to be converted to any single purpose and is likely to end up having multiple uses.
A Waterbridge representative said the company does not comment on pending transactions, but L.A. City Council member Jose Huizar said in a statement that Waterbridge plans a mixed-use development that may include offices, a hotel, stores and apartments or condominiums. There was no announcement about potential tenants.
The property is one of the largest available on the West Coast for conversion to new uses and many investors were interested in getting in on the comeback of downtown's historic district, real estate broker Phillip Sample of CBRE Group Inc. said.
"The rarity of a redevelopment opportunity in this size range, especially in a downtown core like Los Angeles that is clearly on an upward trajectory, created a tremendous level of interest from both private and institutional capital from all over the world," said Sample, who represented the seller.
Waterbridge's plan to combine several uses in one big historic building "will be a game changer for downtown L.A.," Sample said.
No building quite like that exists downtown. Historically, however, the old structure has been many things simultaneously.
It opened in 1908 as the Hamburger department store, and in addition to selling clothing and home furnishings it had an 80-foot-long soda fountain, a restaurant, a grocery store, a post office and a roof garden. The third floor housed the L.A. Public Library for a few years.
There was a house physician's office with a fully equipped operating room ready for emergencies "and a corner where a fainting woman can rest and be restored to strength," The Times reported at the time. There was also a theater where an audience of 1,000 could watch a moving-picture show or a vaudeville act.
The department store grew even bigger after its 1923 purchase by the May Co., a St. Louis department store chain that went on to build many Southern California locations. Among the downtown additions by May Co. was a nine-story tower connected to the original five-story structure and a stately garage at 9th and Hill streets that was one of the nation's first parking structures when it opened in 1926.
The elegant May Co. logo can still be seen in the terrazzo floors at entry points, but glamour has otherwise left the building that ceased being a May store in 1986.
"No public restrooms. Please don't come in," says a prominent sign over a Broadway entrance to the thin assortment of stalls selling inexpensive merchandise, such as T-shirts and toiletries, on the first floor. Outside, white paint is peeling off the fire escapes, and the awnings over the entrances are faded and shabby.
The main elevator bank is closed, and the once stately escalator is blocked with a plywood barrier. Upstairs, however, are floors filled with rows of laborers sitting at sewing machines and stitching together brightly colored clothes.
The historic Orpheum Theater across Broadway from the old May Co. building has been restored, and another former department store next door called Eastern Columbia has been converted to luxury condominiums.
A $100-million, 32-story apartment building is under construction across Hill Street, and the former United Artists theater and office complex about a block away on Broadway is now the 180-room Ace Hotel.
The activity piqued the interest of Waterbridge, said real estate broker Chris Caras of CBRE Group, who worked with Sample on the deal.
"The location within the downtown core," he said, "was a major draw for the buyer."