The red, white and blue logo of U.S. Bancorp appeared atop the tallest skyscraper in Los Angeles on Wednesday as the Minneapolis-based financial company entered final negotiations to take over offices once occupied by defunct accounting firm Arthur Andersen.
Representatives of the bank and building owner MaguirePartners said only that they were discussing a possible lease, but downtown Los Angeles real estate sources said U.S. Bancorp had signed a letter of intent to rent three floors in Library Tower at a cost of about $52.8 million over 15 years. The deal would make U.S. Bancorp the building's largest tenant.
The 73-story tower has been without adornment since First Interstate Bank was acquired by Wells Fargo & Co. in 1996 and four gold I's were removed from the building's crown.
The U.S. Bancorp sign will come down today after the prospective tenant gets a look at its logo amid the Los Angeles skyline.
Sign rights, or signage as it's called in the real estate business, are becoming more important to major tenants, said Stephen Bay, executive managing director of real estate brokerage Insignia/ESG in Los Angeles.
"Tenants will pay seven figures to put their ID on top of a building," Bay said. And at more than 1,000 feet, the top of Library Tower is perhaps the prime perch in the West.
Some landlords, including the owners of the nearby 777 Tower on Figueroa Street, prefer to leave their buildings unadorned, but many landlords dangle signage rights to entice tenants they hope to land or to persuade large tenants to lease even more space.
MaguirePartners said in November that it wanted to become a public company and filed with the Securities and Exchange Commission for an $890-million initial public offering.
Finding a tenant for the 160,000 square feet Arthur Andersen left behind would polish the landlord's image at a critical juncture.
The IPO still is proceeding, although the situation in Iraq and a depressed market for new offerings on Wall Street could delay it, said MaguirePartners spokeswoman Peggy Moretti.
U.S. Bancorp's regional headquarters currently is in Santa Monica, spokesman Steve Dale said. The company is considering relocating that office and consolidating it with others in Southern California.
The Library Tower offices occupied by Arthur Andersen were redesigned in the late 1990s to put managers and employees on a more equal footing in similar-sized cubicles. If U.S. Bancorp moves in, said former Andersen partner Martin Griffiths, the offices "will create an openness most banks haven't been used to, with executives out there in the open."