By Kelsi Maree Borland | GlobeSt.com
LOS ANGELES—Rising Realty Partners has found success gravitating toward more difficult neighborhoods and properties. The company has been a long proponent of the Downtown Los Angeles market—long before the recent renaissance captured investor’s hearts and dollars. Nelson Rising, Rising Realty’s chairman and CEO, partnered with developer Maguire Thomas to build Liberty Square, which houses the US Bank Tower and Gas Company Tower; while, the company recently cultivated the once downtrodden Pershing Square market with its renovation of the PacMutual Building, which sold this week for $200 million.
“We know the every building down here, and we know the tenant base. Our general investment thesis is that we like submarkets that have been out of favor for a long time, but that have the potential to be a catalyst for change,” Matt Ahrens, SVP of acquisitions and capital markets at Rising Realty, tells GlobeSt.com in an exclusive interview. “Downtown Los Angeles definitely has that catalyst. First with Staples Center, then with the County’s investment to build out the metro system that all converges in downtown, and, of course the residential development going on down here. The reason why we like submarkets that are out of favor is because they fill up with marginal landlords, and when we come into a market like Downtown Los Angeles, we can build the product that tenants want and we can really out-compete.”
When renovating a property, Rising Realty looks to improve the entire community. With PacMutual, for example, the company built a public park and living wall to enhance the surrounding area. “In 2012, some people looked at Pershing Square as a liability, and I don’t think that people would say that today,” says Ahrens. “You can’t move your building. The effort that you put into improving the area around your building is just as valuable as the building itself. A healthier community is better for your tenants. We are the first LEED Platinum historic building in Southern California, so we are committed to a sustainable building as well. Ultimately, having healthier tenants is better for your bottom line.”
Ahrens notes that it isn’t only the revitalization of the downtown market that has been a major driver for growth in the office sector there, but also the revitalization of the surrounding neighborhoods, like Silver Lake, Los Feliz, Echo Park and Highland Park. Those neighborhoods are easily commutable to the downtown area and are great home bases for employees. “The gentrification of the adjacent neighborhoods is not talked about as often, but all of these neighborhoods are becoming attractive for office workers to live in,” says Ahrens. “It is not easy to get the Westside from Silver Lake; it is easy to get to Downtown Los Angeles from Silver Lake.”
Rising Realty has a portfolio throughout the Los Angeles area. It also serves as a property manager for several of its buildings, and will continue to manage the PacMutual property.