Spieker Buying Unfinished Cotner Plaza
The thriving business climate on the Westside of Los Angeles is finally breathing new life into a nine-story, freeway-front office building that has sat unfinished for 13 years.
Spieker Properties, one of the West Coast’s biggest office and industrial property owner-operators, should close its purchase of the green-glass building known as Cotner Plaza within the next two months, said real estate broker Chris Houge of Insignia/ESG.
The 73,000-square-foot Cotner Plaza is next to one of the region’s priciest office complexes, the three-tower Westwood Gateway, which straddles Santa Monica Boulevard along the west side of Sepulveda Boulevard. Cotner Plaza sits between Westwood Gateway’s marble-skinned 22-story tower at 11111 Santa Monica Blvd. and a San Diego Freeway onramp.
Houge negotiated the deal on Spieker’s behalf. As a publicly traded real estate investment trust, his client would not disclose the price it has agreed to pay seller Ebel Trust for the property before the sale closes. Nor will Spieker specify what it will cost to complete the building and make various planned improvements.
But Westside real estate sources said a total investment of $14 million to $15 million--including the purchase price plus all costs associated with completing the building as well as tenant interiors--would make sense given prevailing rental rates on the Westside.
Though it boasts a high-profile location, the Cotner building was left unfinished, crippled by financial and legal woes in the 1980s and the severe local recession earlier this decade.
A development team headed by local real estate entrepreneur Jim Shuemaker halted construction as the project neared completion amid California’s development boom in 1986. The team and construction lender Manufacturers Bank, as well as contractors and others, became embroiled in legal disputes that resulted in the bank taking title to the property in lieu of foreclosure on its $13-million construction loan in mid-1992.
Less than two years later, Ebel Trust--headed by another local real estate entrepreneur, Don Greenwood--purchased the property for just over $2 million. Greenwood said he would market the building to prospective users and complete construction. No tenants have been signed, however.
Enter Menlo Park-based Spieker, which has numerous office and industrial developments underway in various West Coast cities.
On the Westside, Spieker owns the 12-story Sepulveda Center tower farther south on Sepulveda; the sprawling Santa Monica Business Park along Ocean Park Boulevard in that city; the multi-building Marina Business Center; the 11999 San Vicente building in Brentwood; and the just-completed Arboretum Courtyard in the bustling eastern Santa Monica commercial district.
“Spieker is a savvy group and obviously they recognize that there’s a lot of demand from tenants but not a lot of space available in the [Westside] market,” said office broker Bob Safai, principal with Madison Partners in Santa Monica. “They look at that location and the low vacancies [in other nearby buildings] and probably see tremendous upside.”
Houge said Spieker plans to create a “Class A” building with rents to match. The company will initially complete the building’s 90%-finished structural “shell”--including exterior marble accents--while replacing the original mechanical, climate-control and electrical systems and adding up-to-date telecommunications facilities.
Houge said Spieker expects to complete the work early next Spring and should be able to complete custom interior work for the first tenants by May 1.
