LOS ANGELES-One of the nation’s largest law firms has signed an $80-million lease for 208,847 sf of class A space at Arco Plaza, establishing another milestone in the once-troubled property’s remarkable comeback and also marking one of the biggest office leasing deals in the history of the central business district.

Terms of the 15-year lease inked by Paul, Hastings, Janofsky & Walker LLP also call for the north building of the plaza’s distinctive black twin towers to be renamed Paul Hastings Tower, according to brokers involved in the deal. The attorneys will move from their current space in the 2.2-million-sf complex’s south tower next July.

The dollar value of the transaction easily eclipses any of Downtown’s other leases that have been consummated in 2001, and ranks as one of the largest in the CBD’s history. The agreement was announced late last night.

“This is a monumental transaction for Paul Hastings and for Downtown Los Angeles, providing unique high rise office building identity to a major law firm,” Lynn Williams, the Cushman & Wakefield broker who represented Paul Hastings, said in a prepared statement provided to GlobeSt.com. Arco Plaza’s owner, Tokyo-based Shuwa Investments Corp., was represented by Tom Kibler of its Shuwa Leasing Corp. unit.

Even before the deal was announced, brokers were cheering a report by Cushman & Wakefield that says the CBD’s office vacancy rate started the fourth quarter at its lowest level in a decade as more tenants choose the area for its top-quality space and relatively low rental rates. The CBD’s vacancy factor of 15.8% is down from 17% at midyear and more than 20% at the start of last year’s fourth quarter.

While the Paul Hastings deal further solidifies the Downtown market’s comeback, it provides an even bigger boost to Arco Plaza itself.

The 52-story complex on Flower Street was built in 1972 and purchased by Tokyo-based Shuwa for an eye-popping $650 million in 1986. The acquisition came at a time when Japanese investors were paying dizzying prices for property across the US and Arco Plaza was perhaps Southern California’s shiniest “trophy” of all.

But the real estate bubble burst within a couple of years, as the Southland slipped into its worst recession since the Great Depression. Arco Plaza’s vacancy rate soared when Bank of America — one of its two signature tenants — was bought out, and hundreds of people working in the building were either fired or relocated to other parts of the country.

Yet, Arco Plaza’s troubles had only begun. A few years later, its other key tenant, energy giant Arco itself, was purchased by London-based British Petroleum. Like BofA, Arco no longer needed much space because its workforce was dramatically scaled back.

By the mid-1990s, the once-glamorous property stood nearly 50% vacant. But its fortunes began to turn back around this spring, after Shuwa decided to quit self-managing the complex and instead hired Cushman & Wakefield to do the job for it.

C&W was soon able to wrap up a long-rumored, $45-million deal for architecture and engineering giant Daniel Mann Johnson & Mendenhall to relocate from its old headquarters a few miles west into 125,000 sf at Arco Plaza. When DMJM moved into the plaza in September, it brought 500 workers with it — also helping to boost the fortunes of retailers in the mall that’s underneath the office towers.

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