The Georgetown Co. has received $56.4 million in bridge financing to redevelop the Herald Examiner Building, a nearly 100,000-square-foot landmark property in Los Angeles.
HFF arranged the financing for the developer through a loan from J.P. Morgan, with the money slated to go toward the restoration of the historic downtown building and its transformation into creative office, retail and restaurant space.
“Lenders were very excited about the deal for a few reasons. The property is in a great DTLA location and Georgetown is a very strong borrower,” Jeff Sause, HFF’s senior director, told Commercial Property Executive. “The credit tenant preleasing also mitigated a lot of the normal risks lenders are used to seeing on these creative office conversions. We had proposals from banks, debt funds and life companies to do the bridge. Lenders were so interested they were even willing to offer 10-year, fixed-rate deals two years before the first tenant took occupancy.”
Designed by pioneering architect Julia Morgan, the building was completed in 1914 and was originally used by William Randolph Hearst as the headquarters for the Los Angeles Examiner. The building was designed with an elaborate lobby that boasted wood-trussed high ceilings, a patterned tile floor and arched spaces complete with carved marble friezes.
The goal of the renovation is to restore the property to its original grandeur.
“Loan proceeds are going to restore and revitalize the façade and many of the historic elements on the interior,” Sause said. “They are going to make large open floor plates for the office space and open up the old windows on the ground floor to create truly one of a kind retail and restaurant spaces on the ground floor.”
Among the tenants that will call the building home are Arizona State University, which will open a Los Angeles-based campus; and restaurateurs Walter and Margarita Manzke of République, who will bring a new eatery to the ground floor.
A new cultural hub
Located at 1111 S. Broadway in DTLA’s lively South Park neighborhood, the building is close to the STAPLES Center, the Microsoft Theater and the Los Angeles Convention Center. An Apple store, two hotels and other retail are planned for the fast-growing area.
The property will also connect South Park with the Broadway Corridor, another neighborhood on the rise.
“We have always been very confident in the growth of the South Broadway Corridor and the strength of the downtown market overall,” Michael Fischer, Georgetown Co.’s vice president, said in a prepared statement. “This announcement is a key step toward bringing back this iconic property in all its former glory.”
HFF’s debt placement team also consisted of Todd Sugimoto, managing director, and Spencer Richley, analyst.
This project is just the latest of numerous that The Georgetown Co. has in the area. Last year, the company completed the $280 million multi-phase redevelopment of Sony Pictures Entertainment’s Culver City Studio Lot, where it added new office and production facilities. The company also had developed a theater and office buildings at the Paramount Pictures Studios on Melrose Avenue, in a joint venture with Paramount Pictures.
In March, RocaPoint Partners and the Georgetown Co. selected JLL Southeast Central’s Project and Development Services to manage the construction of HALCYON, a mixed-use, $370 million project spanning 135 acres in Alpharetta, Ga., set to open this spring.
Image courtesy of HFF