Office Sale, Retail Leaseback Sets Up 60 Lofts

LOS ANGELES-A development team led by a local architect will convert the top floors of the Judson C. Rives office building at 424 S. Broadway to rental lofts and will lease back the ground floor retail to the seller, according to downtown L.A.-based BE Commercial Real Estate. Principal Dwight Everest of BE Commercial tells GlobeSt.com that the unusual sale-leaseback deal reflects the demand for rental lofts downtown as well as the strong Latino retail market in the Broadway corridor.Everest and co-owner Irving Bonios of BE Commercial represented the buyer of the 10-story office building, 424 S. Broadway LP, in its recent purchase of the property from a locally based investor. Everest tells GlobeSt.com that the upper floors of the building had sat vacant for 20 years or more as outdated office space, but the approximately 9,000 sf of ground floor retail space remained full because of the strong Latino retail market along Broadway.One of the challenges that Everest and Bonios faced was negotiating with the tenants, mainly clothing stores and other shops, to get them to vacate the property for six months during building renovations. Once the conversion is completed, the 73,800-sf building will comprise about 8,500 sf of retail space and 60 lofts measuring about 870 sf on average.The managing partner of the 424 S. Broadway LP partnership is David Lawrence Gray, a local architect with experience in other downtown loft conversions. Everest notes that the conversion of the 424 S. Broadway building, which was built in 1907, is one of about nine residential projects under way now on Broadway. The developer will retrofit the entire building and will receive tax credits because of the historic status of the building.