EVOQ Properties Alameda Square – From Warehouse to Creative Office Space…

The Urban Observer had a chance to tour Alameda Square in downtown LA this week, which EVOQ Properties has been transforming from warehouse to state-of-the-art creative office properties.  Read EVOQ’s latest press release for detailed information!

EVOQ Properties Press Release 06/06/2013

Splendid® and Ella Moss® Officially Open New Corporate Headquarters at Alameda Square in Downtown Los Angeles

 L.A. fashion brands latest to call area home, join other fashion labels in building creative enclave 

 LOS ANGELES, June 6, 2013 – Contemporary lifestyle fashion labels Splendid® and Ella Moss® today officially celebrated the opening of their corporate headquarters at Alameda Square in Downtown Los Angeles. The move comes as other creative and fashion companies are building on the area’s growing reputation as a center for fashion on the West Coast.

Los Angeles Councilmember José Huizer; Los Angeles Deputy Mayor Brian Currey; Jonathan Saven, President of Splendid® and Ella Moss®; and Martin Caverly, CEO of EVOQ Properties, as well as other government officials and business and community leaders were on hand for the ribbon-cutting ceremony and offered remarks about the company’s move and the impact to the area.

“Splendid and Ella Moss’ long-term investment and commitment to Downtown set an important example for other companies,” said Councilmember Huizar. “Downtown has long appealed to visionaries who can see its potential. We are pleased that such a dynamic local company will put its roots down here, bringing jobs and an economic boost to the region.”

Alameda Square is owned by EVOQ Properties, Inc. (OTC BB – EVOQ.PK), one of the largest property owners in Downtown Los Angeles. The campus’ location at the cross-section of the popular Arts District and the Fashion District puts it at the center of the Downtown creative community. Other fashion brands that call the area home include American Apparel, Groceries Apparel, J Brand Jeans and Lucky Brand.

“We are excited to enter into a new phase in our company’s history,” said Saven. “The new space – with its rich history, openness and wonderful natural light – will help us further expand the brands. As a Los Angeles-born company, we are pleased that we can stay, grow jobs here and contribute to the community.”

Caverly said, “The completion of the Splendid and Ella Moss space is just the beginning of the revitalization of Alameda Square. In the coming months, we are looking to bring new tenants that not only will bring new amenities, services and new jobs to the campus, but new life to a growing community.”

Splendid® and Ella Moss® announced in October that they signed a 10-year lease with EVOQ to occupy 82,000 square feet of Building 1 at Alameda Square (located at 777 Alameda). The new corporate headquarters, which covers two full floors, houses approximately 225 employees in product development, design, marketing and sales, finance, retail operations, customer service as well as other administrative functions. An additional 100 employees still remain at its finished goods & fabric warehouse, located at 3751 South Hill Street in Los Angeles.

To meet the specific needs of Splendid® and Ella Moss®, EVOQ spent eight months making multi-million dollar improvements to Building 1 and the overall campus. Renovations started early fall of 2012, and included:

Converting the historic warehouse building to a state-of-the-art creative office with large industrial windows, exposed concrete floors / ceiling and open floor plan;

Redeveloping the ground floor and loading dock into retail, restaurant and outdoor public space;

Adding a 6000-square-foot roof deck and kitchen with dramatic views of the Downtown skyline;

Expanding and reconfiguring parking facilities resulting in an increase of 450 spots; and

Adding new landscaping and seating areas to serve a rotating mix of food trucks, coffee vendors and other amenities for tenants and visitors.

“EVOQ made a significant investment in redeveloping the space because we believe Alameda Square and its location are unique,” added Caverly. “There is no other space like this with the expansive views, natural light and open space that creative companies desire. Like Splendid® and Ella Moss®, we are an L.A. company and we’re committed to the continued renaissance of Downtown.”

Built in 1917, Alameda Square includes four buildings covering 1.4 million square feet with American Apparel’s headquarters occupying half of the space. The property has historically played a role in serving as a commercial hub in the region. The warehouse complex and adjacent product market was designed for the Los Angeles Union Terminal Company. Southern Pacific Railroad completed the construction in 1923 and operated the property as a major intermodal produce market and distribution center connecting Downtown to the rest of the L.A. region.

Splendid® is a complete lifestyle brand offering collections for women, men and children with an unmatched approach to casual dressing. Known for its signature stripes and vibrant color, the brand delivers comfortable, classic, effortless style. Ella Moss® offers contemporary fashion for women and girls and is noted for its bold patterns, dramatic dresses and modern styling.

About EVOQ Properties Inc.
EVOQ is one of the largest property owners in downtown Los Angeles, with holdings in industrial, office, retail, residential, and mixed-use real estate. For additional information on EVOQ and its properties, please visit the Company’s website at EvoqProperties.com.

About Ella Moss®

Ella Moss® is a contemporary fashion brand featuring feminine, flirty, whimsical designs inspired by travel, art and music. The collection captures the laid-back sophistication of its Los Angeles roots while offering coveted must-haves for the modern girl’s dream closet. The brand’s unique prints, daring styling and modern twists on vintage finds allows for creating distinctive personal style. Founded in 2001 by designer Pamella Protzel Scott, the Ella Moss® assortment includes ready-to-wear, footwear and swim and can be found at the Ella Moss boutique in Newport Beach, CA as well as at better department and specialty stores domestically, abroad and online. For further brand information or to shop online visit EllaMoss.com.  

About Splendid®

The Splendid® brand is the culmination of a ten year quest to create the ultimate t-shirt. The success in designing an extraordinarily soft material cut into perfectly chic silhouettes was the platform for what is now a complete lifestyle collection of ultra-comfortable, effortlessly stylish collections for women, men, kids and babies. Known for its vibrant palette and bold stripes, Splendid® offers classic, colorful styles across multiple product categories including apparel, outerwear, footwear and swim. Splendid® can be found at its twelve retail locations in the US and Canada as well as at high-end department and specialty stores domestically, internationally and online. For a full listing of stores, to shop online or for additional brand information visit Splendid.com.    

Forward Looking Statements
This release contains forward-looking statements that are made in reliance upon the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements are generally accompanied by words such as “anticipate,” “continues,” “expect,” “forecast,” “outlook,” “believe,” “estimate,” “should” and “will” and words of similar effect that convey future meaning, concerning the Company’s operations, economic performance and management’s best judgment as to what may occur in the future. Future events involve risks and uncertainties that may cause actual results to differ materially from those we currently anticipate. The actual results for the current and future periods and other corporate developments will depend upon a number of economic, competitive and other influences. Many of these risks and uncertainties are beyond the control of the Company, and any one of which, or a combination of which, could materially and adversely affect the results of the Company’s operations and its financial condition. We undertake no obligation to update information contained in this release.

EVOQ Press Release – EVOQ Properties Announces Sale of Desmond Building in Downtown Los Angeles

From EVOQ Properties Press Release:

“EVOQ Properties Announces Sale of Desmond Building in Downtown Los Angeles

LOS ANGELES, APRIL 4, 2013 – EVOQ Properties, Inc. (OTC – EVOQ.PK), a publicly owned real estate firm headquartered in Downtown Los Angeles, today announced the disposition of the Desmond Building, located at 425 West 11th Street in Los Angeles.

Total gross proceeds from the sale were $16.25 million. A portion of the net proceeds was used for general corporate purposes and additional leasing costs at other company properties.


“Capital from this sale will enable us to continue focusing on our core assets, including Alameda Square, in Downtown Los Angeles. Investing in improvements to those properties will attract creative companies that are looking for a unique space at the cross-section of the burgeoning arts and fashion hubs in Los Angeles,” said Martin Caverly, CEO of EVOQ Properties

About EVOQ Properties Inc. 
EVOQ is one of the largest property owners in downtown Los Angeles, with holdings in industrial, office, retail, residential, and mixed-use real estate. For additional information on EVOQ and its properties, please visit the Company’s website atEvoqProperties.com.


Forward Looking Statements
This release contains forward-looking statements that are made in reliance upon the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements are generally accompanied by words such as “anticipate,” “continues,” “expect,” “forecast,” “outlook,” “believe,” “estimate,” “should” and “will” and words of similar effect that convey future meaning, concerning the Company’s operations, economic performance and management’s best judgment as to what may occur in the future. Future events involve risks and uncertainties that may cause actual results to differ materially from those we currently anticipate. The actual results for the current and future periods and other corporate developments will depend upon a number of economic, competitive and other influences. Many of these risks and uncertainties are beyond the control of the Company, and any one of which, or a combination of which, could materially and adversely affect the results of the Company’s operations and its financial condition. We undertake no obligation to update information contained in this release.”

EVOQ Properties Announces Sale of Three Properties in Los Angeles…



According to a Press Release which we received this morning from EVOQ Properties (Former Meruelo Maddux), they have disposed of three of their non-core assets in the Downtown market, including 915-949 S. Hill, a series of vacant lots and industrial buildings, and industrial buildings located at 759 Ceres Avenue and 643 Gladys Avenue, as part of their strategy to pay off debt and recapitalize into higher growth opportunities.

Press Release shown below:


“”EVOQ Properties Announces Sale of Three Properties in Los Angeles

LOS ANGELES, JANUARY 30, 2013 – EVOQ Properties, Inc. (OTC – EVOQ.PK), a publicly owned real estate firm headquartered in Downtown Los Angeles, today announced the disposition of three non-core assets located in Los Angeles. The sales occurred in December and January.


The sales included 915-949 S. Hill, a series of vacant lots and industrial buildings, and industrial buildings located at 759 Ceres Avenue and 643 Gladys Avenue. All of the properties are in Los Angeles.

Total gross proceeds from the sales were $19.5 million. A portion of the net proceeds was used to retire approximately $15.3 million of secured principal debt and $1.7 million of contingent deferred interest.


“We continue to actively pursue our plan to strategically dispose of non-core assets, which allows us to re-invest the capital into opportunities that have the strongest potential for growth and return on investment,” said Martin Caverly, CEO of EVOQ Properties. “We believe our focus on our core assets in Downtown Los Angeles will bring long-term value not only to our company, but to the development of those neighborhoods into a stronger community.”

About EVOQ Properties Inc. 
EVOQ is one of the largest property owners in downtown Los Angeles, with holdings in industrial, office, retail, residential, and mixed-use real estate. For additional information on EVOQ and its properties, please visit the Company’s website at EvoqProperties.com.

Forward Looking Statements
This release contains forward-looking statements that are made in reliance upon the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements are generally accompanied by words such as “anticipate,” “continues,” “expect,” “forecast,” “outlook,” “believe,” “estimate,” “should” and “will” and words of similar effect that convey future meaning, concerning the Company’s operations, economic performance and management’s best judgment as to what may occur in the future. Future events involve risks and uncertainties that may cause actual results to differ materially from those we currently anticipate. The actual results for the current and future periods and other corporate developments will depend upon a number of economic, competitive and other influences. Many of these risks and uncertainties are beyond the control of the Company, and any one of which, or a combination of which, could materially and adversely affect the results of the Company’s operations and its financial condition. We undertake no obligation to update information contained in this release.””

Great Article on Guarantees, By Susan C. Tarnower…

Trends in Commercial Real Estate Loan Guarantees
I.  Introduction
In general terms, a guarantee is a legally enforceable promise made by one party (the guarantor) to answer for the payment of debt or performance of the obligations of another party (the principal obligor or borrower) if the principal obligor fails to make payments or perform its obligations.  A guarantee may be required if a lender determines that the credit strength of the principal obligor needs to be enhanced and that the guarantor can provide meaningful support.
Recently, we have seen high profile cases involving the enforcement of commercial real estate guarantees against individual guarantors.  As described in a Wall Street Journal article dated September 29, 2010 (Robbie Whelan, Real Estate Stings a Backer), Harry Macklowe, a New York developer, has been forced to liquidate or turn over to creditors much of his real estate empire in efforts to resolve the indebtedness he incurred through a personal guarantee.  Similarly, Bruce Elieff, chief executive of SunCal Cos., a closely held development and residential building company, may be liable for up to $230 million in personal guarantees he signed in connection with loans made by Lehman Brothers Holdings to SunCal Cos. on twenty large residential property developments.  The plight of both men should alarm anyone who ever signed a personal guarantee backing commercial real estate loans.
With the increasing default rate on loans secured by commercial real estate, both CMBS loans and loans held on the balance sheets of various lending institutions, guarantors who signed a personal guarantee for this type of loan should be reviewing those loan documents and closely examining the terms in the related guarantees.
In this article, I will look at some of the different types of guarantees individuals may be asked to sign in connection with commercial real estate loans.  I will examine recent cases dealing with the enforcement of commercial loan guarantees.  I will focus on language to look for in those guarantees and suggest some areas for negotiation.  Finally, I will look at trends in future lending requirements for guarantees.
II.  Types of Guarantees
Whether commercial real estate loans are originated through a conduit lending program or by a bank, most of these loans are secured by a guarantee of some sort.  The guarantors for these loans are typically, but not always, individuals who provide some value other than having an interest in the property or an equity interest in the borrower. 
Payment Guarantees.  The most basic guarantee is a payment guarantee in which the guarantor provides a full recourse guarantee to pay the entire amount owed by the principal obligor.  The guarantor typically waives notice, presentment, demand for payment and any requirement that the lender proceed against the principal obligor or the collateral before making a claim against the guarantor.  If there are multiple guarantors, they will be jointly and severally liable.  In addition, this type of guarantee will likely include language that allows the lender to make changes to the loan and its documentation without notice to the guarantor.  As we will see in the cases below, courts generally find such waivers to be enforceable. Recourse Loan Documents.pdf.
Limited Guarantees.  Another common guarantee is a limited guarantee.  The scope of this type of guarantee may be limited in many ways.  Most frequently, a limit is placed on the amount for which the guarantor is liable.  For example, the guarantor can be liable for a specific amount set forth in the guarantee or reference can be made to a specific loan amount for which the guarantor is liable.  The limitation can also be expressed as a cap or as a percentage of the principal amount of indebtedness of the borrower for which the guarantor is providing a guarantee.  The guarantee may be limited to certain specific agreements signed by the borrower.  Whatever the method used, there is some limitation on the liability of the guarantor in this type of guarantee.  
Non-recourse Guarantees.  As conduit loans became more popular in commercial real estate lending over the last fifteen years, one of the strongest selling points for this type of loan has been that it is a non-recourse loan.  This means the lender agrees to take action against the property to recover for losses suffered on the loan rather than taking action against the borrower or guarantor, with a few exceptions.  The guarantor will typically sign a non-recourse guarantee outlining the circumstances under which this non-recourse loan becomes a limited or full recourse loan.  The list of triggers for guarantor’s liability, sometimes called “bad boy carve-outs”, increased as this type of lending became more popular.  Whether the events triggered full or partial recourse evolved over time as well. Non-Recourse Loan Documents.pdf.
A guarantor’s liability is outlined in the exceptions, or carve-outs, in a non-recourse guarantee.  The carve-outs generally fall into two categories-limited recourse or full recourse.  The types of activities which may trigger limited recourse to a guarantor, meaning the guarantor is only liable for losses suffered by the lender attributable to a specific event or activity, may include misapplication of casualty or condemnation proceeds or security deposits, failure to pay taxes or assessments, commission of waste to the property; failure to provide environmental indemnification, failure to maintain insurance or allowing liens to be placed against the property.
The triggers which make a guarantee full recourse are more serious violations, such as a voluntary or involuntary bankruptcy filing, fraud or intentional misrepresentation in connection with the property or the loan, or violation of the separateness covenants set forth in the single purpose entity (SPE) requirements established to keep the borrowing entity separate from any other business entity or debt.
More exotic types of guarantees, such as various types of construction loan guarantees, LTV maintenance guarantees or remargin guarantees are beyond the scope of this article.
III.  Enforcement of Non-recourse Guarantees
Courts tend to strictly enforce the obligations under these non-recourse guarantees against guarantors.  Most of the decisions focus on the specific terms in the applicable guarantee and the borrower’s sophistication in the marketplace, as well as borrower’s representation by knowledgeable counsel, as the basis for enforcing the guarantees.
The most recent significant case in this area is the March 8, 2011 New York Supreme Court, New York County, decision granting summary judgment for the plaintiff in UBS vs Garrison.pdf (www.practicelaw.com/2-505-3426).  The court held that the non-recourse guarantee, in that case called a “bad boy guaranty”, was an instrument for the payment of money only and not an unenforceable penalty or a violation of public policy relating to bankruptcy.  In that case, the lender’s claim under the guarantee was triggered by a bankruptcy filing by the borrowers during a forbearance period after the loan was in default.  This case seems to trump the ING case mentioned below.
The court in 111 Debt Acquisition LLC v. Six Ventures, LTD, 2009 U.S. Dist. LEXIS 11851 (S.D. OH 2009), reached a similar decision based on another borrower’s bankruptcy filing.  In that case, the borrower filed for bankruptcy, a violation of one of the carve-out provisions contained in the loan guarantees.  The guarantors argued that since the bankruptcy petition was eventually dismissed, the guarantor’s liability under the carve-out provision had not been triggered.  The Court found it was irrelevant that the bankruptcy petition was dismissed. The debtor’s act of filing for bankruptcy triggered the carve-out provision and made the guarantors fully liable for the debt.  Other courts have also found recourse provisions prohibiting the filing of a bankruptcy petition enforceable.  See First Nationwide Bank v. Brookhaven Realty Assocs., 223 A.D.2d 618 (N.Y. App. Div. 1996); FDIC v. Prince George Corp., 58 F.3d 1041 (4th Cir. 1995).
In CSFB 2001-CP-4 Princeton Park Corporate Center, LLC v. SB Rental I, LLC 980 A.2d 1 (N.J. Super. 2009), the court strictly construed a carve-out provision requiring the borrower to obtain lender approval of any subordinate financing.  The borrower secured subordinate financing without bank approval but paid the subordinate loan off eighteen months prior to  defaulting on the primary loan.  The guarantors and the borrower argued that their liability under the carve-out provision should not be enforced because the default was cured and the lender was not harmed.  The court held it did not matter that the lender had suffered no damages as a result of the borrower’s violation of the carve-out provision.  “Having freely and knowingly negotiated for the benefit of avoiding recourse liability generally, and agreeing to the burden of full recourse liability in certain specified circumstances, defendants may not now escape the consequences of their bargain.”  
In Blue Hills Office Park, LLC v. JP Morgan, 477 F. Supp. 2d 366 (D. Mass. 2007), the borrower settled a zoning dispute with an adjoining property owner and received a cash payment without obtaining bank approval.  The borrower subsequently transferred those funds to a different entity.  The court found the zoning rights to be a part of the mortgaged property pledged to the bank based upon the definition of mortgaged property in the loan agreement. Therefore, the settlement of the zoning issue, without prior bank approval, and transfer of those funds resulted in a violation of the carve-out provision relating to misuse of funds relating to the mortgaged property and pledged to the bank.  As the Court stated: “[W]here sophisticated parties choose to embody their agreement in a carefully crafted document, they are entitled to and should be held to the language they chose.”
Even an amendment of the borrower’s articles of organization can trigger full recourse liability because this may be viewed a violation of the SPE covenants.  In LaSalle v. Mobile, 367 F. Supp. 2d 1022 (E.D. La. 2004), the borrower amended its original articles of organization to change its name to modify its stated purpose from “solely … the acquisition, ownership, operation and management of a hotel…and such activities as are necessary, incidental or appropriate in connection therewith” to the broader language of “any lawful activity for which limited liability companies may be formed under the Act.”  The mortgage clearly stated that the loan would become full recourse if the borrower failed to maintain its status as a single purpose entity.  The borrower and the guarantor argued that the amendment of the articles did not harm the bank because the borrower never engaged any activity other than the management of the hotel.  The court found these arguments irrelevant and held the recourse provision had been triggered based solely on these changes to the articles of organization.
The one case that goes against this trend is ING Real Estate Finance (USA) LLC v. Park Avenue Hotel Acquisition LLC, 2010 Westlaw 653972 (02/24/10) (Unpublished).  In that case, the court narrowly construed the full recourse language in the guarantee in favor of the guarantors.  The court focused on an inconsistency between language found in the cure provisions of the loan agreement and language found in the carve-out provisions.  The non-recourse carve-out language included incurring any additional debt or permitting a lien to obtain priority over the secured lien as a carve-out provision.  The default language in the loan agreement similarly prohibited additional debt and liens obtaining priority, but that section of the loan agreement also provided the borrower with for a thirty (3) day period to cure this type of default.  After defaulting on the mortgage, the borrowers then failed to make a tax payment.  The lenders argued this triggered full recourse liability under the carve-out provisions.  However, the borrowers paid the taxes, with accrued interest, in less than the thirty (30) day cure period.  The court held it was necessary to reconcile the cure period provided in the default clause with the lack of a cure period in the “bad boy” carve-out provisions.  The court also noted that New York would not attempt to collect on a tax lien for at least a year, so the lender’s lien position was never in jeopardy, ultimately ruling that the guarantee was not triggered.  As mentioned above, however, the recent decision in Garrison appears to have put lenders back in their position of strength in regard to the enforcement of commercial real estate loan guarantees against guarantors.
These cases show how even a temporary violation of a carve-out provision can result in the entire debt becoming a full recourse obligation for a guarantor.   Guarantors need to know and abide by all the carve-out provisions in the loan documents.  They also need to know if the principal obligors are similarly abiding by all terms of the loan documents.  
IV. Language in Guarantees
Because of the potential liability facing a guarantor, any reviewer of an existing guarantee or negotiator of a future guarantee should be sensitive to certain key words and phrases found in guarantees.
Clearly identify the collateral pledged in any guarantee.  If the loan is being made by a local bank, the guarantee form provided by that bank may specify that the guarantor grants the bank a security interest in all of the guarantor’s property that is in the bank’s control or custody.  This creates a problem if the guarantor has several different accounts or deposits at the bank because the bank can and will draw on those accounts or deposits should the guarantor’s liability under the guarantee be triggered.  If there is no specific reference limiting the security for the guarantee, be sure that the guarantor knows the full extent of guarantor’s property the lender can attach should it seek to enforce the guarantee.
Trigger Language.
A guarantor needs to be aware of all the events of default, or triggers, in any guarantee.  These could include obvious ones such as payment default, bankruptcy, or failure to perform required obligations; but less obvious and more subjective ones might also be included, such as the death or dissolution of the guarantor or the lender’s determination that a material adverse change has occurred in the financial condition of the guarantor or borrower.
Note all the waivers specified in guarantee.  These may include guarantor’s waiver of any limitation of liability or recourse arising under any law; waiver of certain defenses, such as lack of consideration; waiver of a homestead exemption or any other exemption under applicable law; waiver of the argument based on unenforceability of the borrower’s obligations; waiver of bankruptcy ruling; or waiver of jury trial.  It is important to know if any of these waivers are unenforceable under the state laws governing the guarantee.
Venue and Governing Law.
The guarantor needs to know where litigation on the guarantee will take place and what laws will govern interpretation of the documents.  It is important to determine the convenience of such a location for the guarantor prior to guarantor’s having to appear in that court.
A guarantor needs to determine the length of the term of any guarantee.  A guarantee may be specifically tied to one loan as the term of that loan may be extended or renewed.  If a guarantee is construction-related, the term may be for a specific period of time beyond payment in full of the related indebtedness, such as one or two years.  Be sensitive to any attempts to extend the term of a guarantee, such as language including the institution and pursuit of any action on the guarantee as part of the term of the guarantee.  Some guarantees are continual and on-going; for example, a guarantee may cover all future indebtedness of the borrower or a continuing guarantee may remain in force as long as any of the borrower’s liabilities are outstanding.  Be sure the guarantor knows how long this liability will be in place.
Financial Reports.
A guarantor must know what kind of financial information he is to provide to the lender and how frequently he is obligated to provide this information.  These requirements can range from the guarantor providing certain financial statements upon the lender’s request to the guarantor’s having to provide quarterly financials and audited annual reports.  Note if failure to provide any required financial information triggers a default under the guarantee or carries financial penalties.
Negotiating points.
There are some areas of negotiation in guarantees.  
●  Try to limit the waiver language to items that are legally enforceable under the applicable law.
●  Limit the liability of the estate after the death of a guarantor.  
●  Avoid having the spouse of the guarantor sign a guarantee.  
●  Ask for a specific revocation as to future transactions.  
●  Limit the collateral affected by the guarantee.  
●  Limit the representations and warranties for which the guarantor is responsible.  
●  Make the time frame for which the guarantor is responsible as narrow as possible.  
●  If there are multiple guarantors, try to cap liability to a specific amount for each guarantor.  
●  Try to cap the overall liability.  
●  Be aware of applicable legal constraints on suretyship, waiver language, notice requirements and dispute resolution provisions.
The key focus of any review, or negotiation, of a guarantee is the language in that document. Read every word carefully.  Any guarantor must be fully aware of all his responsibilities and liabilities.
V.  Looking ahead to new lending programs
We are seeing the return of capital to the commercial real estate market through a variety of lending sources.  As borrowers and guarantors enter the marketplace, it is helpful to have some idea of what may be considered standard or minimal requirements for guarantees in these new programs.  We have two sources of information that provide some insight into what may be ahead for guarantors in the commercial real estate markets.
Conduit Lending Programs.  Conduit lending is gradually returning to the marketplace.  The volume of conduit loans is higher this year than last.  More conduit lenders are opening shop.  At that same time, securitized lending industry groups are working to develop standardized representations and warranties, underwriting, and other documentation to be utilized in connection with conduit loans in order to comply with proposed rules under the Dodd-Frank Wall Street Reform and Consumer Protection Act.  The proposed representations and warranties are of interest to potential guarantors because guarantor is defined and because a baseline for limited and full recourse obligations is outlined in the proposed section setting forth Recourse Obligations.  
In these proposed representations and warranties, a guarantor is defined as a natural person or persons, or an entity distinct from the borrower (but may be affiliated with the borrower), that has assets, other than equity in the related mortgaged property, that are not de minimus.  In other words, the guarantor must have an independent source of net worth.  This is a change from the past practice of sometimes allowing SPEs with no net worth to sign guarantees.
In the draft representation to be given by issues relating to the recourse obligations for loans to be securitized, a loan will become full recourse: (i) if the borrower should file, consent to, or acquiesce in bankruptcy or (ii) if the borrower or guarantor colludes with other creditors to cause an involuntary bankruptcy filing with respect to the borrower or (iii) if the borrower allows or engages in unpermitted transfers of the property or equity interests.  The limited recourse provisions include: (i) misappropriation of rents, security deposits, insurance proceeds or condemnation awards; (ii) borrower’s fraud or willful misrepresentation; (iii) willful misconduct by borrower or guarantor; (iv) breaches of the environmental covenants or (v) commission of material physical waste at the property.  These proposed recourse provisions give us some idea of the minimum recourse provisions that are likely to be required in conduit lending programs.
Fannie Mae Loans.
Fannie Mae has issued new loan documents to be used beginning in April 2011.  These documents can be found on the efanniemae.com website.  Fannie Mae has promulgated a new payment guarantee and a guarantee of non-recourse payment obligations, as well related loan agreements which set forth the terms of the obligations under those guarantees.  In non-recourse loan agreement, the triggers for limited recourse liability are: (i) failure to pay rents and security deposits to lender after an event of default; (ii) failure to maintain insurance; (iii) failure to apply insurance or casualty proceeds as required under loan documents; (iv) failure to provide books and records as required; (v) failure to apply rents as required; or (vi) waste or abandonment of the property.  Full recourse is triggered by (i) failure to abide by SPE requirements; (ii) an unauthorized transfer; (iii) bankruptcy or consented-to involuntary bankruptcy or (iv) fraud or material misrepresentation by any party in connection with the loan.  Again, these recourse provisions give us an idea of the obligations of a guarantor of any loan made through a Fannie Mae lending program.
Both Fannie Mae guarantees have been updated to address several issues, including the effect of a claim made pursuant to a guarantee on community property.  The guarantee is now cross-defaulted with the loan documents in the sense that a default under the guarantee is a default under the loan documents.  Waiver language includes notices, presentment, demand for payment and a requirement that lender proceed against the borrower and collateral prior to proceeding against the guarantor.  Changes can be made to the loan and the loan documents without notice to the guarantor.  The lender can pull a credit report on the guarantor once a year or get a credit score at any time for the guarantor.  In addition, Schedule 1 to each of these guarantees contains all the state-specific language to be incorporated into a specific guarantee.  This schedule provides a quick reference to the applicable statutes impacting guarantees in the various states.
Becoming familiar with these new Fannie Mae documents and keeping up with the representations and warranties as finally adopted in conduit lending programs will better prepare a guarantor for more realistic negotiations of guarantees in connection with future loans.
VI.  Conclusion.
All guarantors must know the potential liabilities they are assuming by signing a guarantee.  Guarantors also need to be cognizant of the impact borrower’s actions have on them as individuals, as they may have the most to lose.

South Park Car Wash Site May Go Hotel…


According to the LA Business Journal, the car wash site at the corner of Figueroa & Olympic, across from LA Live, is being looked at by three different developers who are each considering the site for mixed-use hotel development.  The owner, Robert Bush, is reportedly asking for $25,000,000 for the site, which equates to $682 per square foot. 

The mixed-use project would most likely include a hotel, retail and condominium component.  Several new hotels have been announced in South Park, in anticipation of a new Farmers Field NFL stadium and Convention Center, proposed for the south western portion of LA Live.  New hotels include the double Marriott  which is located just east of the car wash site… along with the Wilshire Grand redevelopment, and the ACE hotel, located off Broadway.  There is also word that Chetrit Group may be reopening their Hotel Clark property as a boutique hotel, as well as the Trinity Auditorium site.


Downtown Streetcar Update: Residents Will Vote on Tax…

So far the Downtown Streetcar project has secured $11 million and is seeking $50 million from the federal government.  The remaining $64 million will be voted on in an upcoming November mail-in ballot, that will determine if tax payers are going to be picking up the tab.

If the voters pass the assessment, business owners would be taxed based on their properties proximity to the streetcar line, as well as their parcel size.  Taxes are expected to be $.45 cents a square foot for properties located along the streetcar route, $.32 cents for properties one to two blocks away, and $.16 cents for 3 blocks away.  Curbed LA shows an example of the tax,  “…At the likely bond rate of 5 percent, a 10,000 square foot parcel directly on the streetcar line would pay $4,940 a year. That size property one to two blocks away would pay $3,460 and $1,730 if located three blocks away.”  Condo owners would be taxed based on a different schedule.

The streetcar route will travel from LA Live, up Figueroa, across Seventh, north on Hill, east on First, south on Broadway; then west on Eleventh and back to LA Live. Due to the fact that public properties can’t be taxed, along with other budget issues, officials have decided to cut out the portion of the streetcar route that would bring riders to Walt Disney Concert Hall and the Music Center.

By establishing a Streetcar in other cities such as Portland and Seattle, locals communities have seen an increase in development and investment around the streetcars path. Many downtown investors and developers have been eyeing parcels that may benefit from the proposed streetcar, however, we will have to wait to see what the voters say in November to get any sort of confirmation.

New South Park Luxury Apartment Development To Break Ground May 22nd…

A joint venture between Chicago based Fifield Company and LA based Cypress Equity Investments called Century West Partners, is scheduled to break ground on a new South Park luxury apartment development called Avant, on May 22nd.  The first phase will include 247 apartments split between two 7-story buildings, and above 11,000 square feet of restaurant and retail space.  The address of the two towers will be 1340 S Figueroa and 1355 S Flower.  These two structures will be joined by an elevated walkway and will share a 252 unit parking garage.  Phase one is expected to be complete by November 2013.

The 2nd phase of Avant will be located at 1500 S Figueroa and will include 194 luxury apartments; expected to break ground in early 2013.

New 65,000sf South Park Hotel Renderings…

Located on a small 7,500 square foot in-fill lot, next door to the Luma building, and which was expected to be turned into a city park after being used as a drug den for dealers over the past several years; is a new hotel in the works. The building is expected to be 65,000 square feet, and contain anywhere between 40 and 60 rooms, according to the developer, who bought the site for $2.1 million in 2011. The property is located at 1130 S Hope Street.

Below are a few renderings recently released for the project… Architect is LA-based XTEN Architecture.

Current Building:

New Farmers Field Stadium Video…

Here’s a glimpse into what Farmers Field Stadium will be like on game day… video was created by stadium architect Gensler, Convention Center hall architect Populous, Gilbert Lindsay designer Melendrez, and parking structure architects HNA Pacific.

AEG is now going through its public comment period on its draft environmental impact report.

Desmond Building Plans – South Park…

Last night CBRE and EVOQ Properties (Formerly Meruelo Maddux) hosted an open house party, where they unveiled plans for the Desmond building and promoted the owners new name change; which we first announced back on June 3rd.  The party was packed with brokers, good food and fancy cars…?

The Desmond building is going to be converted to 4-stories of creative office space, with rents from $30 psf! Ground floor will have retail, including a restaurant, and the rooftop is being considered as a lounge.  EVOQ Properties currently owns the parking lot next door to the site, which at one time had plans for a 21-story residential tower, but will now be used for restaurant parking. Office tenants will most likely park at a neighbor garage at the southwest corner of Hope & 11th street.

South Park To Get A 32-Story Apartment Tower…

Today the Downtown News announced that Developer Onni Group, from Vancouver Canada, is in the Plan-Check phase on a 32-story apartment tower, located at 888 S Olive Street, in Downtown LA.  The project is expected to have 283 apartment units, 11,000 square feet of ground floor retail and a 662 space parking garage.

The site sits on an approx. 36,670 square foot lot, which was entitled back in 2009 by LaeRoc Funds and sold to Onni in early June of 2011.  Included in the sale was the 163,000 square foot Coast Savings Building, which was approx. 65% occupied at the time of the sale – both sites sold for $16.5 million.

According to the Onni’s VP, Chris Evans, the $100 million project has secured construction funding and is expected to break ground by August, with a 2015 opening date.

Onni also owns the below parcel, which is approx. 1.5 acres on the corner of Flower & 12th Street, which they plan to develop as a residential high-rise at some point.

Investment Opportunity…

We have identified an investment opportunity and have secured a $1,350,000 loan at 5% interest only for the next 4 years, and are looking to raise $200,000 in capital from Qualified Investors within our network.  Below is a summary of the opportunity:

  • Coastal market in Orange County – City has experienced 36.8% growth from 2000-2009.
  • Property produced an Adjusted Gross Income of $176,000 in 2010, and $188,000 in 2011.  Current Net Operating Income is approx. $98,000.
  • Property is currently owned and managed by an 88-year-old gentleman who cannot manage the site efficiently – rents are below market, rooms need light renovation work, there is currently NO internet presence.
  • Significant opportunity to increase net income through light renovation, online marketing and local community promotion.
  • Value Add Opportunity: Property is located on a large lot and comes with a vacant 4,000 square foot lot, for a total of 20,600 square feet of land.  Zoning allows for a development of 3 times the current size of the building.  Ocean views from 2nd & 3rd floors are possible.
  • Strategy:  Purchase property based on in-place income, do light renovation, raise rents and increase net income while entitling the site for a 3-story mixed-use development with ocean views.  Hold for 2-3 years and either redevelop or sell entitled site.
  • Capital Breakdown: Looking to raise a total of $200,000 in equity, which breaks down as follows:
  1. $100,000 down payment
  2. $57,500 renovation & capital improvements
  3. $15,000 reserves
  4. $27,500 closing costs & fees

For more information on this property, please contact Jed Tarr via EMAIL

LA Downtown News Releases Updated Info On 70 Downtown Projects…

The Los Angeles Downtown News has just released their updated report with the latest information on 70 downtown Los Angeles real estate projects.  As the article mentions, the recovery appears to be underway in downtown, as many stalled projects are moving forward or have recently opened, and new projects have been announced.

Click here to view article

Photo: Developer Linear City plans to break ground in April on a renovation and residential conversion of the former Metropolitan Water District headquarters building at 1111 Sunset Blvd

Bundy Village Goes to Hudson Pacific For $88.5 Million…

A close source tells us that it looks like Bundy Village will go to highest bidder, Hudson Pacific for $88.5 million.  Sale at the northwest corner of Olympic & Bundy includes 11.5 acres and an existing 50’s bow truss building.

The site has quite the history; being approved in 2010 for a high-density senior housing and medical plaza development, and then appealed and overturned in August 2011, after an immense amount of community opposition (more info on history of site here)

The “Best & Final” bids came in from:

  •   Hudson Pacific
  •   Mar ( allan mck) and Alecta
  •   McCarthy Cook and Northwood

Earlier bidders included,

  •   David Jordan ( ex hines ) and Invesco
  •   Jeff Worthe and Shorenstein
 (Map: Fight Bundy Village website) 

(Old Rendering)

Perry Loses Most of Downtown To Huizar’s 14th District…

Last night the Los Angeles Redistricting Commission voted to give Councilman Jose Huizar’s 14th district the majority of downtown; leaving Jan Perry’s district with a little more than Staples Center & LA Live in the central city.


Draft of new Redistricting Map of Central City

 As summarized by The City Maven, the Redistricting Commission’s key votes included:

  • Moving Baldwin Hills and Leimert Park from CD 8 to CD 10
  • Moving Little Tokyo, Skid Row, Civic Center, Cathedral of Our Lady of the Angels, Music Center, Grand Avenue, Bunker Hill, and the financial and fashion districts from CD 9 to CD 14
  • Moving USC from CD 8 to CD 9
  • Keeping Toluca Lake in CD 4, taking with it part of Studio City
  • Keeping all of Koreatown and Little Bangladesh in CD 10
  • Keeping Westchester, west of the San Diego (405) Freeway, in CD 11
  • Keeping Watts in CD 15
  • Agreeing to split two districts between the basin and San Fernando Valley

(Proposed Draft Map)

Downtown Parking Lot Files For Permits: 22 Story Apartment Tower…

As reported by Brigham Yen,  LA city permits were filed recently (12/15/11) on a downtown parking lot, located at the south-west corner of 8th & Hope, for a ground-up 22-story mixed-use high-rise with 290 apartment units and ground floor retail/office.

The site was originally planned for development by CIM group, who according to Brigham Yen sold the property to Wood Partners in 2008 – however according to title reports, the property is still owned by CIM 830 S Flower LLC; last transferred in July 2008 for $17,000,000 (roughly $475 per square foot), from CIM/8th & Hope LLC, as seen below.

(Click images to enlarge)

Farmers Field Stadium: Renderings Released For LA Convention Center Replacement …

In order for AEG to build their Farmers Field Stadium, they must demolish the West Hall of the LA Convention Center; and according to their agreement with the city, they must replace the demolished portion.  Yesterday AEG and Architect Populous, presented designs to the Ad Hoc city committee for the 20,000 square foot Convention Center wing, which will replace the West Hall.  The new facility would rise one story above Pico Blvd; connecting the existing South Hall to the proposed stadium, making the entire Convention Center one congruent building (Current Convention Center is split between two separate spaces). Pouria Abbassi, General Manager of the LA Convention Center said, “This is 21st century design…This places us in the top-tier to be able to capture those electronic shows (referring to E3, a large & popular gaming convention)…E3’s booking agents prefer to host in one large space”, he says.

While AEG is making progress on their design plans, the overall goal of building a downtown stadium is dependent on them securing an NFL team.

New Los Angeles City Council District Boundaries Released…

The Redistricting Commission released a draft of the new Los Angeles City Council District boundaries map today, which will be discussed among the commissioners this afternoon at the Van Nuys City Hall.  Jan Perry’s Ninth District lost most of downtown, as the 14th District (Jose Huizar) and the 1st District (Ed Reyes) took over most of it – leaving Jan Perry with just a portion of South Park, which includes the Staples Center & LA Live, along with the majority of South Los Angeles, east of the 110 freeway.

Click here for the Los Angeles City Council Draft Map Proposal

Downtown Central City

Here is an overall summary as reported by The City Maven:

  • West Hills will move from the Third District to the Twelfth
  • Sunland-Tujunga will move from the Second District to the Seventh
  • The Sixth District picks up Foothill Trails and Shadow Hills
  • The Second District will pick up all of Studio City and Toluca Lake, which were previously part of the Fourth District
  • Lake Baloba, Encino, Sherman Oaks, Bel-Air and the Hollywood/Highland complex move into the Fourth District
  • The Fifth District loses its Valley neighborhoods, picking up Mid-City West, South Robertson and Greater Wilshire
  • LAX will remain in the Eleventh District but part of Westchester moves to the Eighth District
  • Koreatown will remain in the Tenth District
  • Atwater Village, Glassesll Park, Rampart, Hollywood and Rampart remain in the Thirteenth District
  • The First District picks up most of Highland Park

UPDATE: Major South Broadway Theater Purchased – Going ACE Hotel…

UPDATE 1/23/2012:  Councilmember Jose Huizar announced today that the ACE Hoel chain has indeed purchased the United Artist Theatre, and has announced plans to redevelop the 13 floors into 180-hotel rooms, as well as add a pool, restaurant, bar and reactivation of the historic theater with approximately 1600 seats.  The press release states,  The Ace Hotel property falls within the boundaries of the L.A. Fashion Business Improvement District, which provides clean and safe services, as well as marketing and economic development support for the area. 

(Original Article: Oct 24, 2011)

The United Artists Theatre on South Broadway in Downtown Los Angeles has been purchased for $11 million (approx $117 psf), after being on the market since 2009 with an initial asking price of $15 million.  The building was built-in 1927 and according to the Loopnet listing, contains 73,783 sf of office space, above a 2,214 seat theater.

The buyer, Greenfield Partners is a real estate investment company out of Norwalk, CT, who has joint ventured on hotel acquisitions in the past and according to BrighhamYen, may possibly have plans for a hotel venture on this building.

United Artists Theatre is one of 12 main theaters along the Broadway Theater District, and its redevelopment would serve as a significant stimulus for the south Broadway area as well as be a big accomplishment for the Bringing Back Broadway initiative.  The proposed streetcar, which would run along Broadway and throughout the rest of the central city, may also find the new owners to be  a strong supporter and source of funding, as it would be in their best interest to have a streetcar run outside their building.

Bringing Back Broadway Announces New National Retail Tenant…


Councilmember Jose Huizar; visionary behind the Bringing Back Broadway initiative, announced today that a national retailer is moving into the historic Broadway corridor.  Ross Dress for Less will open a 39,000sf retail store in the historic Woolworth’s Department Store building, located at 725 S Broadway.  According to the Press Release, the store is expected to generate up to 50 new full and part-time jobs.

“We are looking forward to Broadway serving as home to an iconic Downtown Ross retail store…It’s fitting that the historic Woolworth’s building, which was so beloved by Angelenos in years gone by, will now provide a new retail destination for modern-day Downtown residents, workers and shoppers.” – Councilmember Huizar said in a statement.

Last month the building was purchased by Paragon Commercial Group out of El Segundo, who specializes in acquiring, developing and managing high-quality, value-add retail investments anchored by best in class, creditworthy retailers in high barrier to entry markets, according to their website.


“Reactivating another Broadway storefront and returning this historic building to its original purpose is a significant accomplishment in the ongoing efforts of Los Angeles City Councilmember José Huizar’s Bringing Back Broadway. The revitalization initiative will soon celebrate the fourth anniversary of its 10-year plan aimed at the restoration and revitalization of the Historic Broadway Theatre District.” – Councilmember Huizar’s Press Release.

The grand opening is expected by early 2013.

In The Know: Meruelo Maddux Properties Changes Name & Office Location…

We just learned that Meruelo Maddux Properties, who recently emerged from Chapter 11 Bankruptcy, is going to be doing business under the new name of Evoq Properties. Along with the new name, comes a new office location at the 626 Wilshire building – expect the official announcement soon.

Meruelo Maddux sought Chapter 11 protection on several of its properties in 2009 as the real estate market took a nose-dive. The company claims to be the largest non-government property owner in downtown, with holdings in industrial, residential and mixed-use in the central city.

Some of the company’s development holdings in South Park include:

1051 S Grand Ave

1120 S Grand Ave

1117 S Olive Street

1105 S Olive Street

1226 S Olive Street

1100 S Olive Street

949 S Hill Street

825 S Hill Street

UPDATE 1/03/2012: Sale Expected Soon On Myrons South Park Site…

UPDATE:  We understand from a local source that Jim Myron; owner of the site, wants $2 million more than the highest bid which came in at $15.5 million back in October, bringing the total asking price to just over $301 per square foot for the land. 1/03/2012.

Original Articlehttp://theurbanobserverdotcom.wordpress.com/2011/10/18/updatesale-expected-soon-on-south-park-site/

(Photo: Lee & Associates)

Downtown Development Outlook 2012…

2012 should be a year of action for Downtown Los Angeles real estate; at least, we are hoping. We do know of a few key projects that should be delivered this year, including a 104,000sf Target, located at the revamped 7th & Fig retail center (opening this Fall), and the highly anticipated Grand Ave Civic Park (opening this Summer) which will cover 12 acres between Grand Ave and Spring Street, and will include a dog run, walking paths, open space and a large event lawn (Construction site pictured left)…LA’s version of Central Park?

Other Downtown projects which should make headway this year include Homer Williams Marriott Hotel development; expected to break ground in late 2012, the Broad Museum, which is under construction, and the 19-story Grand Ave apartment building, which needs to break ground by October 2012 in order to fulfill its agreement with the Grand Avenue Authority committee. The Wilshire Grand Redevelopment, which just closed its doors in December, is planning to start demolition in August for its first phase 45-story hotel and condominium tower, and of course we are hoping AEG, the developers of Farmers Field Stadium, makes progress on their plans for an NFL stadium and convention center – currently in negotiations with NFL to secure a team.

Then there are the projects that haven’t officially been announced, but are rumored to be in the planning stages and could make a presence in 12′, including the United Artist Theater, which is expected to become an Ace Hotel, the Trinity Auditorium and Hotel Clark renovations, both of which are said to be going Hotels, under the management of King & Grove Hotels, and several South Park parking lots with potential plans for hotels, multifamily apartment buildings and perhaps even condominiums.

Also, don’t forget about the Brockman building, which has been held up in escrow over title issues ever since selecting a winning bidder in August. Once title clear up, we expect those units to be hitting the market, either as high-end rental or condos.

More information can be found at: Downtown Los Angeles News

UPDATE: Downtown Streetcar Not Selected For TIGER Funding Round #2, But Still On Track For 2015 Opening…

The Downtown Los Angeles Streetcar was hoping to get $37 million of TIGER (Transportation Investment Generating Economic Recovery) funding from the U.S. Department of Transportation, but was not chosen this year, making it the second year the Streetcar has missed out on TIGER grants for their $125 million project.  According to the Los Angeles Downtown News, there were 848 applicants and 46 projects that were awarded funding this year. Dennis Allen, who is the Executive Director of the LA Streetcar, said the project remains on track for a 2015 opening, regardless of missing out on TIGER funding.

The LA Streetcar has successfully raised $11 million in funding so far; $10 million from the CRA and $1 million in city funds. Once the project receives environmental clearance (expected end of 2012),  Allen says they will apply for up to $60 million in grant funding from the Federal Transit Administration’s Small Starts program. The remaining cost will be covered by other federal funding programs, with the majority most likely being raised from a special tax assessment program for area landowners, who will benefit from having the Streetcar in their neighborhood.

UPDATE: CRA Approves Astani’s Scaled Down Plans For 8th & Grand, City Council Up Next…

The site at the north-east corner of 8th and Grand, which in 2006 was approved for three buildings (38, 22 & 15 stories tall), with 875 condominium units, went before the CRA on Thursday Dec 15th; who voted to cancel the current approvals and re-approve the site for a scaled down project. Developer, Sonny Astani; who recently went through bankruptcy on his downtown Concerto building (now owned by ST Residential), will next request approval from City Council for his new plans which include two 7-story buildings with 700 residential units, 30,000 sf of retail and 737 parking spaces.  Astani said $50 million in in-place financing is available for the project and that he will be moving forward on his plans next year.  More information on the project can be found in this CRA Memorandum.

Hotel Clark To Be King & Grove Hotel…

As reported by Brigham Yen, the Hotel Clark at 4th & Hill Street in Downtowns Historic Core; which has sat empty for decades, is going to be open for business once again, under the flagship of King and Grove. No information has been released as to the opening date, but the news is sure to spark excitement among downtown enthusiast, as the vacant building has stifled economic growth for the block; within a neighborhood which has undergone significant revitalization over the past 10 years.

The Chetrit Group, who is the owner of the Hotel Clark, and several other empty and obsolete buildings in the central core, including the Giannini Building (649 S Olive), the Embassy Auditorium (839 S Grand) and the 611 W 6th Street tower, is a billionaire family out of NYC, mainly run by two brothers, Joseph and Jocob Chetrit. The family made news recently over rumors that the brothers were parting ways, which led to speculation about whether there would be a major restructuring among the family’s assets, and that perhaps some of their downtown LA buildings would become available for sale. We have spoken to a source close to the family in NYC, who said the Chetrit’s may consider selling 611 W 6th, but that offers would have to come in at $250 psf to get their attention.

While Chetrits downtown holdings offer many challenges for redevelopment, such as structural issues due to the 94′ earthquake that was noted to have done significant damage to the Embassy Auditorium; the buildings are in the heart of downtowns most revitalized areas and would contribute greatly to the overall resurgence of downtown if renovated.

Exposition Light-Rail Line: Test Ride With Zev Yaroslavsky

Starting early next year, the light-rail trains will run from downtown’s 7th Street Metro Center out to La Cienega and Jefferson.  Phase 1 station in Culver City is currently under construction and Phase 2 will extend the Culver City line out to 4th & Colorado Ave in Santa Monica, making a total rail line of 15.2 miles, connecting Santa Monica to Downtown!

Here is a video of a light-rail test ride with Supervisor & Metro Board Member Zev Yaroslavsky.

1340 S Figueroa: Libeskind Tower Site – Scaled Down Plan Submitted To Planning Department

What was originally planned as the Libeskind tower; which included a design for a 43-story structure made up of 273 condominium units, 9,000sf of restaurant space, and a 10,000sf spa, has now been scaled down to two seven story buildings that will contain 250 apartments and 11,000sf of retail space.

The site, located at 1340 S Figueroa Street, across from the LA Convention Center, was bought in September in a joint venture between Cypress Equity Investments and the Fifield Companies, who recently submitted plans to the city for development.  The 1.31 acre site was listed on Loopnet in September of 2011 for $17,000,000, which equates to about $295 psf.  The two tower development is expected to cost approx $95 million.

According to a posting on Cypress’ website, construction will start in the second quarter of 2012.

Sale Expected Soon On Myrons South Park Site…

(Photo – Lee & Associates)

The owner of a South Park site; containing 58,095 sf and  made up of a parking lot & the former Myron’s Ballroom building, is expected to select a winning bidder soon, with the sale price expected to come in over $15 million ($258 psf +), according to local real estate experts.

The site is in the process of being entitled for a 33-story tower, with 346 residential units and 25,490sf of ground floor retail space, according to the Lee & Associates listing site.  However, it is likely the new owner will scale back the plans, which were originally conceived before the economy went into recession.

The site is one of over 78 parking lots in the South Park area with potential for ground up development, many of which have already been entitled.  As Farmers Field progresses in finding an NFL team willing to play in Downtown and secures full approvals, South Park will see many of these parking lots sell to developers for large mixed-use projects.

The Urban Observer is keeping a close eye on downtown development movement, and will keep you updated as new information comes in.  For information on any of the sites below, feel free to contact us.

9th Annual Fall Downtown Program & Tour…

The 9th Annual Fall Downtown Los Angeles Program & Tour is coming Tuesday November 15th.  This is a great opportunity to learn about what’s new downtown, with a panel of all-stars who will discuss the exciting projects that are underway and planned for the central core.  Following the panel discussion will be a bus tour of some of downtown’s hottest properties.  We’ll see you there!

Click the below flyer to register: