Rising Returns with Value-Add Purchase of PacMutual Complex
- Apr 25, 2012
A partnership led by veteran executive Nelson Rising has made its debut with the acquisition of the landmark PacMutual building in Downtown Los Angeles. Rising Realty Partners bought the 424,598-square-foot, three-building asset in association with Mount Kellett Capital Management L.P., its financial partner. According to the Los Angeles Times, local real estate sources estimate the deal’s value at $60 million.
The deal marks a return to the market for Rising, whose 40-year career includes service as CEO of Catellus Development Corp. from 1994 to 2005 and of MPG Office Trust Inc. from 2007 to 2010.
The PacMutual building offers strong asset value, a premium Downtown location, historic design, potential for larger floor plates, street-level retail and below-grade parking that make the property an attractive acquisition, say the new owners. Built in stages from 1908 to 1936, the complex is linked through the first six floors by interior passageways. The team plans an overhaul that will transform the vintage asset, now 63 percent occupied, into a Class A draw for corporate and creative tenants alike, Rising executives told the Los Angeles Times. Santa Monica-based Industry Partners will handle construction management and leasing duties.
Recent local trends in demand for office space will generate interest among prospective tenants. “We are seeing the boundaries of the creative office market shifting east,” explained Jim Jacobsen, an Industry Partners co-founder and principal. “With little or no space available in Santa Monica for creative users with a requirement of 10,000 square feet, downtown Los Angeles is becoming a more attractive alternative.” During the past two years, tenants from the West Side and other Los Angeles submarkets have migrated Downtown and leased some 500,000 square feet of space.