Firms Sign Lease for $40 Million at Design Center

Seven advertising and public relations firms owned by the Interpublic Group of Companies Inc. will consolidate their offices at the Pacific Design Center in West Hollywood as part of a $40-million lease announced Monday.

The firms will take 145,500 square feet including the top three floors of the nine-story green building at 700 San Vicente Blvd. Some of that space has never been occupied even though the building was completed in 1988, landlord Charles S. Cohen said.

Moving in August from separate locations mostly on the Westside are marketing and public relations firm Bragman Nyman Cafarell; public relations firm Weber Shandwick Worldwide/Rogers & Cowan; marketing agency Jack Morton Worldwide; public relations agency PMK/HBH; marketing agency and event planner Momentum Worldwide; direct response media company ID Media; and MAGNA Global, the media negotiation and programming arm of New York-based Interpublic.

The consolidation will result in an undisclosed amount of savings on rent for Interpublic, said real estate broker Steve Kolsky of Newmark of Southern California, who represented the tenant in negotiations.

Earlier this month Interpublic reported a first-quarter loss of $16.9 million, or 5 cents a share.

Cohen and a real estate investment fund managed by Cheslock Bakker & Associates bought the two-building Pacific Design Center in late 1999 and undertook a $30-million capital improvement program that included repositioning the green tower as an office building.

The dramatic “Blue Whale” building facing Melrose Avenue that opened in 1975 successfully attracted tenants in the design industry that filled it with showrooms, but the angular green building proved better at attracting attention than tenants.

Architect Cesar Pelli & Associates designed both buildings and a third, red building that is still on the drawing board. With the green building now mostly leased, Cohen said he hoped to start construction by the end of next year on the 400,000-square-foot red building.

Vacancy in the West Hollywood office market has hovered at 16% to 18% for more than two years, Kolsky said, but the Interpublic deal will push overall vacancy below 11%.

Cohen owns other buildings serving the design industry including Decorative Center Houston and the D&D; Building in New York.