LOS ANGELES, April 16th, 2012 –PacMutual, a landmark building in Downtown Los Angeles, was acquired today by developer Rising Realty Partners (“RRP”) and funds controlled by their financial partner Mount Kellett Capital Management LP (“Mount Kellett”.) The acquisition marks the notable reentry into the California real estate market by the RRP team of CEO and Chairman Nelson Rising, President Christopher Rising and Executive Vice President Reed Garwood. RRP plans to transform this historic property into a marquee lifestyle commercial office space for Class A local, regional and national tenants.
Current occupancy is 63%.
”We’ve been observing a historic shift in how people use office space,” says Nelson Rising. “Tenants are seeking work spaces that fit their business and professional lifestyles. They are looking for an experience. PacMutual offers all of that and more.”
RRP teamed with Mount Kellett to acquire PacMutual, because of its strong asset value, premium location, unique historic design, street-facing retail, below-grade parking and the potential for larger floor plans.
“We’re happy to be working on PacMutual with RRP as our management and acquisitions partner given their strong track record and the quality of this asset,” said Andrew Axelrod of Mount Kellett Capital Management.
RRP is repositioning PacMutual to appeal to a variety of downtown Los Angeles office users, and has engaged Santa Monica-based real estate services firm Industry LTD to work with them on the building’s transformation. Industry Partners, an affiliate of Industry LTD, will manage the leasing and marketing effort. RRP selected Industry Partners for its expertise and successful track record in repositioning a wide variety of office and industrial properties to meet the demands of creative office users who are driving leasing activity in Los Angeles.
Industry Partners will establish a Downtown Los Angeles office in PacMutual under the direction of Carle Pierose who will be responsible for leasing and Tom Majich who will be in charge of construction management.
“We are seeing the boundaries of the creative office market shifting East,” says Industry Partners founder Jim Jacobsen. “With little or no space available in Santa Monica for creative users with a requirement of 10,000 square feet, downtown Los Angeles is becoming a more attractive alternative. Downtown LA has done a wonderful job in reinventing itself with more loft-style housing and an infrastructure of entertainment and services to support it, and as a result is attracting a new breed of office user.”
The RRP lease-up strategy will benefit from improving market conditions in the heart of the city. Downtown Los Angeles has attracted over 500,000 square feet of tenants from the west side and other areas in the last two years. As regional access to the area improves and housing options become more available in the downtown area, this trend is expected to continue.
“We understand what a quality retail experience, in an inspiring setting, can do for a tenant’s quality of life,” says Christopher Rising. “Building-wide free Wi-Fi and 24/7 accessibility is essential, however, the tenant’s experience must be authentic and not feel forced. Whether it’s easy access to public transportation, more green areas, creating a sustainable environment, or simply constantly interacting with our tenants – Our primary goal is to create a full lifestyle experience for our tenants, rather than just some place to work.”
RRP knows California. Drawing from the seasoned experience of co-founder and real estate veteran Nelson Rising and the progressive vision of his team of real estate experts, RRP has strength in identifying prime California investment opportunities. This is their first project as a new company.
PacMutual consists of 424,598 square feet in three buildings, connected by interior passage-ways through the first six floors. The complex was originally built for the Pacific Mutual Life Insurance Company as their headquarters at the turn of last century. Designed by architects John Parkinson and Edwin Bergstrom, the first building opened on the corner of 6th and Olive in 1908.
Current tenants include American Business Bank, leading architecture firm NBBJ, and wildly successful online retailer Nasty Gal. Ground floor retail is marked by well known restaurant Water Grill.
About Rising Realty Partners:
Rising Realty Partners (RRP) is a full-service real estate platform specializing in creating world-class commercial and industrial properties. Core competencies include land and property acquisition, development and entitlement, repositioning, property management, asset management, and construction management. RRP executives have been creating value for investors in California commercial real estate markets for over four decades by striking the perfect balance between dynamic vision and trusted best practices.
About Mount Kellett Capital Management:
Mount Kellett Capital Management LP ("Mount Kellett") is a multi-strategy investment firm focused on global distressed, special situations and opportunistic investing. The firm has over 100 employees with offices in New York, Hong Kong, London, and Mumbai. The firm closed its first fund, Mount Kellett Capital Partners, in December 2009 and currently manages approximately $7 billion. Mount Kellett was founded in 2008 by Mark McGoldrick and Jason Maynard. Mark McGoldrick was the co-founder and head of Goldman Sachs Global Special Situations Group from 1997 to 2007. Jason Maynard, who heads Mount Kellett’s Asia business, was previously the head of the Goldman Sachs Asian Special Situations Group. Nick Weber, head of Mount Kellett’s European business, was previously the co-head of the Goldman Sachs European Special Situations Group.
About Industry Partners:
Industry Partners (http://www.industrypartners.com) is an entrepreneurial real estate services firm specializing in the representation of landlords, tenants, and developers, with a particular focus on creative work environments and adaptive reuse projects in West Los Angeles. The firm offers real estate brokerage, investment advisory, development and construction management services.