This year, MaguirePartners, downtown's largest landlord with about 5.5 million square feet of high-rise office space, bought out its partner in Library Tower and is one of the bidders for BP Plaza. Robert F. Maguire III, managing partner of MaguirePartners, said the numerous bids for BP Plaza reflect expectations for higher rents. The bidding for BP Plaza "is a real example of what a lot of investors see happening in downtown L.A.," Maguire said. "We will act very aggressively if we like the property."
For investors shopping for properties nationwide, downtown Los Angeles looks attractive in comparison with central business districts in San Francisco and Boston, which have been hit by the technology industry bust and a surge in construction.
In a forecast of the nation's 10 largest office markets by Cushman & Wakefield, downtown Los Angeles emerged as No. 2, behind Washington, with the best prospects of rental growth through the end of 2003.
Much of the investor interest has focused on the area's top-quality towers, which tend to attract tenants even during tough economic times.
Last year, the occupancy rate at the 41-story Ernst & Young Plaza at Figueroa and 7th streets rose to about 90% from about 65% and is continuing to rise, said Michael Escalante, senior vice president at building owner Trizec Properties. He said the firm has received multiple offers from tenants at "very exciting rates" for the building's top floor.
"Our intention is to expand in downtown Los Angeles," Escalante said.