WeWork-Anchored LA Landmark Sells for $43 Million

By Veronica Grecu

The U.S. arm of Italy-based Sorgente Group found a buyer for its Fine Arts Building in downtown Los Angeles’ Financial District. The 115,902-square-foot asset was sold for $43 million to Manchester Capital Management, an investment firm based in Santa Barbara, Calif., that purchased the property on behalf of an undisclosed private investor.

Fine Arts Building in Los Angeles

Both the seller and the buyer were represented in the transaction by NGKF Capital Markets President, West Coast Capital Markets Kevin Shannon, Executive Managing Director Ken White, Managing Director Laura Stumm and Managing Director Gibran Begum.

The building was 87.5 percent occupied at the time of sale. In fall 2014, WeWork signed a 15-year lease agreement for 44,500 square feet of space—or nearly 40 percent of the building—at a lease rate of $36.03 per square foot annually, according to Yardi Matrix data. Other tenants include Pfeiffer Partners Architects, LTK Consulting Services, Hypothesis, SWA. NGKF is currently seeking additional tenants for two vacant units in the building. The annual asking rent for the 10,946 square feet of creative office space is $42.00 per square foot.

“The Fine Arts Building is one of the truly iconic office destinations in Los Angeles with distinctive architecture that makes a powerful statement in the cityscape,” said Begum in prepared remarks.  “The building’s timeless design provides the framework for an inspiring workspace as a unique alternative to the typical steel-n-glass office towers in the area.”

Designed by Los Angeles architects Albert Raymond Walker and Percy Augustus Eisen and completed in 1926, the Fine Arts Building is a compact 12-story structure located at 811 W 7^th St., on a pedestrian-heavy “Restaurant Row” and within walking distance to world-class restaurants, coffee, bars, hotels, LA Live/Staples Center, the Broadway Theatre District and Metro subway stations. In 1974, the building, which features Romanesque Revival architecture, was declared a historical cultural monument in recognition of its majestic design elements reminiscent of a Renaissance palace. The lobby is beautifully decorated with tiles by Pasadena artist Ernest Batchelder, a mural by Anthony Heinsbergen and a bronze sculpture by Burt Johnson.

In June 2012, Sorgente Group of America acquired the Fine Arts Building from Los Angeles attorneys Brian Kabateck and Mark Geragos for $28.5 million or $237.46 per square foot. Kabateck and Geragos had purchased the building for $23.5 million or $195.80 in spring 2008.

Image courtesy of Yardi Matrix