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LOS ANGELES-Kor Realty Group has opened the doors of its 322-unit Pegasus Apartments, a conversion of the former Mobil Oil Co. West Coast office building that is being called the largest adaptive reuse project in the city.

The $53 million complex, where Kor has already rented more than 100 apartments, is a 13-story residential tower at 612 Flower St. that is being managed and leased for Kor by Beverly Hills-based Kennedy Wilson. It was designed by Santa Monica-based Killefer Flammang Architects, which is the architect for a number of prominent Downtown office building conversions. Kor acquired the former Mobil office building, which had been vacant for more than 10 years, about two years ago. The conversion was completed over 10 months by general contractor Taisei Construction.

Greg Schem, president of Los Angeles-based Kor, tells GlobeSt.com that the company expects the building will be filled with renters by early next year at the current rate of lease-up, which is about 35 units per month. Schem says Kors plan going in is to hold the property for five years after stabilization. Rents at the Pegasus range from about $2 per sf to $2.25 per sf, with unit sizes ranging from about 600 to 1,350 sf. The Downtown Los Angeles apartment market is one of the tightest in Southern California, with a vacancy rate of approximately 2%, although that figure varies somewhat among the several submarkets within Downtown, such as the core financial district, the creative artists district and the old bank district.

The Pegasus combines what Kor describes as classic, late 1940s architecture with contemporary finishes and furnishings. Kor executives and city officials have slated a ceremony for July 31 at which Los Angeles Mayor Jim Hahn will present the developer with a proclamation naming the Pegasus as a building of historic significance.

Pegasus is located on an entire city block with frontage on Wilshire, Flower and Sixth. It’s next to one of Downtown’s newest and most popular gathering places, The Standard Hotel, and includes a mix of studio, one- and two-bedroom apartments. On-site features include a rooftop pool and gardens, a fitness center with skyline views, a full-time concierge and 24-hour courtesy patrol. Each unit has granite countertops in the kitchen; polished concrete flooring and Berber carpeting; a washer and dryer, microwave and dishwasher; and each unit is pre-wired for television and high-speed Internet access. Some of the units also have balconies and patios. The ground floor retail space is approximately 12,000 sf, which Kor will be renting to a high-end restaurant, mini market, bakery, coffee shop and other service retail businesses.

The Kor Realty Group has been one of the early developers in Downtown Los Angeles. Along with the Pegasus Apartments, other properties the company has developed include the Santa Fe building at Main and Sixth streets in the historic district, which are an existing building of 29 units and an attached office building that Kor plans to convert to apartments. When finished, the Santa Fe will include 132 units. The developer is also converting its existing Molino Lofts apartments at 1001 E. First St. into 75 condominiums. Among its other L.A. area apartment projects are 121 units in a five-story Hancock Park loft development with views of Wilshire Country Club, and 115 units getting under way just outside of Culver City on Venice Blvd. near Sony Pictures. Besides these projects, Schem tells GlobeSt.com that Kor could potentially built another 600 units at sites in other parts of Los Angeles where it is contemplating new projects.

Kor Realty Group is a privately held real estate investment, development and management firm owned by Schem, Brad Korzen and Jeff Smith. The company’s portfolio includes eight hotels, 3,500 apartment units and several commercial property holdings. Its recent acquisitions include the Sheraton LAX hotel and the Summerfield Suites Hotel in Hollywood. During 2002, the company closed more than $100 million in acquisitions.

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