Italian investors buy Clock Tower building in Santa Monica
The Clock Tower, a Santa Monica office building beloved by Westside creative firms, has been snapped up by Italian investors who specialize in buying trophy historic properties.
Clad in white terra cotta, the 12-story Art Deco-style office high-rise on Santa Monica Boulevard near the Third Street Promenade commands some of the highest rents in Southern California. It is considered one of the choicest addresses in the burgeoning technology and entertainment business enclave known as Silicon Beach.
“It’s ground zero for Silicon Beach and downtown Santa Monica. It has ocean views and a ton of character,” said former tenant Ophir Tanz, chief executive of GumGum Inc., an Internet advertising-services firm that outgrew its space there. “I always wanted to buy it myself.”
Sorgente Group of America Corp., which controls the famous Flatiron Building in New York, bought the Clock Tower for $34.3 million. The seller was a limited liability corporation headed by Los Angeles accountant Harvey Bookstein, according to real estate data provider CoStar Group.
Some tenants in the 53,465-square-foot tower pay as much as $6 a square foot per month, twice the rate for offices in some of the best skyscrapers in downtown Los Angeles. Occupants include auto information company TrueCar Inc., online deal-of-the-day company LivingSocial Inc. and post-production company Famiglia Di Vendetta.
The Clock Tower was completed in 1929 but is well preserved, said Veronica Mainetti, president of Sorgente Group of America. Her only immediate goal is to upgrade the two elevators.
Sorgente knows its L.A. history. It owns the cherished Fine Arts Building in downtown Los Angeles, one of the best-known historic buildings in the region. It was erected in 1926 for tenants in art-related fields and is elaborately decorated with statues, tiles and other artistic flourishes.
Sorgente acquires and operates prized historic buildings on behalf of pension funds and other investors, Mainetti said. It is an affiliate of Italy-based Sorgente Group and its leaders have a special fondness for architectural achievements of earlier eras, she said.
“I personally have an incredible respect for the past and tradition in general,” said Mainetti, who was born in Italy. “What fascinates me about buildings or objects from the past is their representation of victory over time.”
The Clock Tower and the Fine Arts Building were designed by Walker & Eisen, a Los Angeles architecture firm responsible for other 20th century landmarks including the Oviatt Building and the Ambassador Hotel in Los Angeles and the Beverly Wilshire hotel in Beverly Hills.
Upgrade planned for L.A. shopping center
The owner of a mid-Los Angeles shopping center that was destroyed by rioters in the 1990s and then rebuilt has acquired more land and seeks to expand and upgrade the mall.
Plans call for making the Midtown Shopping Center a more family-friendly meeting place, partner James Young said, with extensive pedestrian walkways, seating areas and outdoor dining.
“I always thought that given the time and right attention this would be a first-class area,” Young said, “so I rebuilt.”
Major tenants now include a Ralph’s supermarket, a CVS pharmacy, Orchard Supply Hardware and Bank of America. Potential tenants for Young’s planned additions include family “sit-down” restaurants and a fitness center, he said.
Midtown Shopping Center Associates bought the land it had been leasing under the shopping center plus two adjacent properties for $42.5 million from Catellus Development Corp.
The investment group that bought the 14.5-acre property bounded by Venice, San Vicente and Pico boulevards includes Young Management Co., which will manage and redevelop the shopping center.
This transaction gives his group ownership of the land under the buildings they own as well as 3.5 additional acres that are on the eastern and western edges of the site. Young said that he has tried to buy the land since 1978 and that he rebuilt the center after the 1992 riots because he thought the neighborhood would recover its luster.
The Mid-City intersection of three of the city’s busiest boulevards is catching on as an increasingly popular retail destination. The center is across San Vicente from Midtown Crossing, a recently completed shopping center anchored by a Lowe’s home improvement store. Ross Dress for Less is expected to open a branch there this summer.
“Retailers like to pioneer and like to cluster,” property broker Timothy Bower of CBRE Group Inc. said. “The confluence of all those streets there really makes it a natural for development.”
L.A. County rents climb
Apartment vacancies plunged in Hollywood during the last 12 months and rents increased as the neighborhood continued to rebound from the recession. But vacancies were still more plentiful in the Santa Clarita Valley, where former renters bought low-priced homes.
Rents rose across most of Los Angeles County during that time as both blue- and white-collar companies added jobs at a faster pace than the national average, a report said. And landlords are expected to continue raising apartment rents in the months ahead, especially in neighborhoods where empty apartments are scarce.
Since the recession, Los Angeles County rents have risen 12% to an average of $1,654 a month, according to a first-quarter report by apartment real estate brokerage Marcus & Millichap.
“Rents in the Westside cities and downtown have climbed nearly 20% since the most recent trough, and renters that signed bargain leases just a couple of years ago are finding it challenging to meet the new requirements,” the report said.
The five tightest rental markets — vacancy was less than 3% in each of them — were South Los Angeles, the South Bay, Palms/Mar Vista, Brentwood/Westwood/Beverly Hills and Hollywood.
But the availability of cheaper housing for sale in northern suburbs has kept rents in check. The vacancy rate was 5.3% in the Santa Clarita Valley and 7.4% in the Antelope Valley.