City National Lease Tops $100M

Financial terms of the transaction were not disclosed, but industry sources peg the value of the lease at well above $100 million.

In a separate transaction, a local investment group doing business as 606 Olive LLC has acquired the City National Bank building at 606 S. Olive St. for $29 million, according to John Anthony of the Charles Dunn Co.

City National Bank was represented in the Arco Plaza lease by Lynn Williams, William Puget, Carl Muhlstein and Jeffrey Welch of Cushman & Wakefield. Thomas Properties Group was represented internally by Kent Handleman, managing director of leasing. As part of the transaction, the Arco Plaza and Bank of America Tower will be renamed "City National Tower," with new signs slated to appear on the complex in September 2004. The tower will serve as the bank's new administrative center, bringing together more than 20 departments. The bank also will relocate its nearby Library Tower banking office to 6,600 sf in a three-story building that sits between the two ARCO Plaza office towers. The entire property, which is on Flower Street between Fifth and Sixth streets, will be renamed "City National Plaza" in September 2005.

Russell Goldsmith, CEO of City National, says that one of the major factors in the banks decision to relocate to Arco Plaza was the $125 million in improvements to the complex that Thomas Properties Group announced earlier this year. The banks move to the new location will begin next year and is expected to be completed in 2006. The bank, which leases 110,000 sf at the 606 S. Olive St. building, will continue to occupy space there, including a ground-floor banking office. City National says it will move out of the office space at 606 S. Olive St. when its lease there expires in 2006, but it will continue to operate its bank branch there.

John Anthony of the Dunn Co. tells GlobeSt.com that the new owner of the 606 S. Olive St. building acquired it from locally based Citinational-Buckeye Building Co., which had owned the 24-story office tower since it was built in 1967. Anthony, Dennis Slattery and Dan Cherrie of Charles Dunn Co.'s Downtown office represented the seller of the 283,251-sf property, which was built in 1967 and was 97% occupied at the time of the sale.

Anthony says the transaction reflects recent strong investment sales activity Downtown and that the buyer was attracted by the property's location in the heart of Downtown. The building is leased to a roster of credit tenants, including the General Services Administration, which occupies 105,000 sf.