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Wallflowers in a Hot Market

Commercial real estate: Even when demand is high, some buildings seem destined to remain vacant, but others sometimes get a new lease on life.

March 20, 2001|BOB HOWARD | SPECIAL TO THE TIMES

The project was developed in 1982 with the aerospace market in mind, noted Solomon. He said the complex was part of the overall collapse of the Century Boulevard market, which was 35% vacant for much of the last 10 years. The Century Boulevard corridor has improved with a 22.2% vacancy rate, but the 5757 building needs upgrades to make it appeal to modern tenants, Solomon said.

The new owner plans to do just that, according to Nagel, Decron's president, who said the complex has been renamed Airport Spectrum. A $10-million renovation will begin in April. In the meantime, Nagel said, the owners have signed tenants to new and renewal leases on about 80,000 square feet and are negotiating additional deals for about 100,000 square feet.

One of the most unusual stories is that of 1100 Wilshire Blvd., which has remained more or less vacant since it was built in 1986, according to Mike Dunn, a broker with Charles Dunn Co.

The 37-story luxury office tower was built by a successful East Asian businessman, Tsai Ming Yu, but was never more than 10% occupied. The skyscraper was completed as the downtown L.A. office market was hopping, said Dunn, who brokered one of the building's first leases.

But several factors combined to thwart additional leasing, Dunn said, including some design oddities and the stubbornness of the building's owner, who seemed to reject nearly every proposed lease .

The building has no underground parking, Dunn said. Instead, the first 15 of the tower's 37 floors are parking.

"Every floor has a fantastic view because the first offices are on the 16th floor, but the parking arrangement is odd," Dunn said.

L.A. businesspeople who like to pop in and out of their offices won't tolerate parking structures of much more than six floors, Dunn said, adding that a trip up or down 15 floors is both dizzying and time-consuming.

Nonetheless, Dunn believes 1100 Wilshire could be leased if management marketed it aggressively.

"It's not the location," Dunn said. "It's a viable market and there are other buildings nearby that have leased up fairly well."

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