‘Dynamic and Diverse’ : Asians Take to L. A.’s Financial Climate
When, subtly, does domination (political, financial or cultural) slip from the grasp of one city or area, and pass to another?
Almost from the very day that the first mission and garrison was established in 1776 at San Francisco, the city was clearly dominant in the state as the financial and cultural center.
But when, again subtly, did the shift to Los Angeles begin and how far has it progressed? How many years ago was it that the encyclopedias stopped flatly describing San Francisco as the “financial center of California” and began slipping in the qualifier: “financial center of Northern California?”
“Historically,” according to Paul Alanis, president of UIC Group (USA), “San Francisco remains attractive, but the situation is rapidly changing. Government regulation of downtown San Francisco is an inhibitor, and the continuing growth of the Los Angeles economy at the expense of the San Francisco economy is taking its toll.”
As president of UIC Group, a partnership that is 60% owned by Singapore-based United Industrial Corp. Ltd., Alanis finds Asian investors “far more comfortable with the West Coast than the East, and on the West Coast, far more comfortable with the more dynamic and diverse Los Angeles than they are with San Francisco.”
And, as evidence of this confidence, Alanis points to UIC Airport Center Associates’ recently announced $70-million purchase of the Airport Center, located on Century Blvd. at the entrance to Los Angeles International Airport from the Equitable Life Assurance Co. The complex consists of four steel and concrete office structures encompassing 1 million square feet, three parking structures and two development land parcels.
The UIC partnership was formed in New York City in 1981 and, after consummating one major office transaction there--the purchase and resale, in 1984, of a 1-million-square-foot office building two blocks from the World Trade Center--the operation was moved to Los Angeles after a series of small ventures here established the viability of the Los Angeles market.
“Our U.S. operations are based here indefinitely now,” Alanis adds. “The New York experience was, frankly, a good investment opportunity for us, but we really had no long-range interest in the East Coast.”
And, while individual Singapore investors have long been active in the Los Angeles market, he continues, “UIC, to the best of our knowledge, is the first publicly-held Singapore company making a major acquisition here.”
It is unlikely to be the last, however. “The Singapore market, itself,” Alanis adds, “is tremendously oversupplied with hotels and office structures. So overbuilt, in fact, that they are looking elsewhere and have an obvious interest in places like China and Hong Kong, but the U .S. is the greatest immediate opportunity for Asian investors.”
Somewhat of a deterrent to Hong Kong, of course, is the political uncertainty over the expiration of the current lease with the British that expires in 1997. “Although,” Alanis points out, “the British have renegotiated the lease giving Hong Kong another 50 years of ‘economic independence’ during which the Chinese will respect private ownership of property even though, politically, it becomes a part of the People’s Republic.
“Right now, Hong Kong is in a revival of sorts simply because for a while, it dropped so low. But no one knows what’s going to happen. Most people feel that by 1997 the Chinese will look more like the Hong Kongese than the Hong Kongese will look Chinese. A sort of reverse takeover because the Chinese are becoming so overwhelmingly capitalistic.”
With revenues last year of $103.7 million and retained profits of $31.9 million, the parent UIC Corp., is a diversified firm active in consumer products, petrochemicals, resorts and real estate, and maintains offices in Indonesia, China, Hong Kong, Malaysia and England as well as the U .S.
The small, preliminary real estate transactions in Los Angeles that encouraged UIC to go ahead with the purchase of the Airport Center involved four properties in the $3 million-to-$5-million range in Burbank, Westlake Village, downtown Los Angeles and Pasadena.
The decision to move into the LAX area, Alanis adds, was largely prompted by the fact that “while there has been a glut out here, we feel that a turnabout is due. In 1983 and early 1984 about 10 or 11 projects were all completed almost simultaneously in the Century Boulevard-El Segundo area, and by the end of 1984 there were about 1 1/2 million square feet of vacant space. But now it’s being absorbed at the rate of about 500,000 square feet a year and there are no new ones on line.”
The four structures that UIC Airport Center Associates acquired, all Class A office buildings, are EAC I, built in 1962 and the area’s first high-rise with 254,000 square feet of space on 12 stories; EAC II (1966), with 240,000 square feet on 13 stories; EAC III (1968), with 312,000 square feet on 14 stories, and EAC IV (1983) with 219,000 square feet on 12 stories. All are within walking distance of several hotels, including the Crowne Plaza and the Sheraton.
“We have no intention of changing the name of the center, itself, from the established Equity Airport Center,” Alanis adds, “but we feel that as an incentive, there could be sign rights for key tenants in the individual buildings.”
Welton Becket Associates designed EAC I, II and III, and Gin Wong and Associates was the architect of EAC IV.
Tishman Management West Corp., which has been the leasing and management agency for Airport Center for 20 years, will continue in that capacity under the direction of Helene Hendrickx.
“Airport Center,” Hendrickx adds, “is an opportunity for UIC to participate in the expansion of this area which we project to occur in the next 20 years, and we plan to be a big part of it.”
And, demonstrably, is the first major Singapore-investment foot in the door in Los Angeles.
