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Commercial Real Estate

Group Gains Control of 7-Acre Site

November 20, 2001|MORRIS NEWMAN | SPECIAL TO THE TIMES

Showing confidence in the "creative" office space market during a particularly slack period, Los Angeles real estate investors have signed an $11-million lease for a 50,000-square-foot industrial building near the corner of Jefferson Boulevard and Rodeo Road in Los Angeles.

The lease gives effective control of a seven-acre, three-building site to an investor group calling itself 5901 Rodeo Road LLC. The same Los Angeles investors, which include principals of Home Silk Properties, earlier acquired two other buildings on the site, and now have a total of 155,000 square feet within the assembled property.

"Basically, the deal amounts to the owner of the two adjacent properties getting control for the long term over the third building," said Chris Georges of the Klabin Co., a leasing agent for the property.

Brokers would not disclose the duration of the lease, but called it "very long term." Georges compared the lease with a long-term ground lease, because it gave the investors control of the entire property for several years, allowing them to market the three buildings as a single development.

Favored heavily by dot-coms and other Internet-related businesses, the demand for creative office space soared in the months before the "tech wreck" that followed the March 2000 stock peak. Now the real estate market is awash in space that has been heavily discounted for sublease.

Ron Rader of the Klabin Co. represented the tenant in lease negotiations, while Doug Marshall and Stuart Klabin of the same company represented the owner, the Roberta Knaster family.

Located just east of the Hayden Tract, a popular site of industrial-to-office conversions in Culver City, the three buildings are among the most recent examples of the trend of converting drab industrial buildings into architecturally piquant "creative buildings."

The goal of the investors is to unify the three buildings into a single campus, Georges said. The buildings will be reoriented to the interior of the property, and fencing and landscaping will reinforce the sense of a unified campus.

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