LOS ANGELES-Chicago-based UGL Equis Corp. has launched a Downtown L.A. office, its second location in the Los Angeles area, with the hiring of six brokers from Studley. The new office, in the US Bank Tower at 633 W. Fifth St., is headed by Josef Farrar and David M. Kluth, both named as senior vice presidents-managing directors.

Farrar and Kluth have a combined 45 years in the industry and have both specialized in tenant representation throughout their careers, a specialty they will continue with Equis, which is tenant rep only. The two tell GlobeSt.com that they are opening a new shop in Los Angeles at a time when the office market here presents new challenges as a result of rising rents and the consolidation of building ownership.

The other Equis location here is an office of eight brokers in West Los Angeles that is headed by Mark Berman, SVP-managing director. Michael Sheinkop, executive vice president of brokerage operations for UGL Equis, tells GlobeSt.com that the firm would have liked to have an office in Downtown L.A. sooner.

“We would have liked to have a Downtown office three years ago, but the opportunity did not present itself for us to provide the kind of caliber and depth of experience that we can provide in one move of this type,” Sheinkop comments. “We’re very much about cultural fit and the people,” he explains, so it was important for the firm to land a team like Farrar and Kluth’s and to be able to put it in place as an up-and-running office.

Farrar and Kluth both tell GlobeSt.com that their team was happy at Studley and was not looking to leave. “Our team has been approached by many firms over the years, but because we were happy at Studley, we never considered leaving,” Farrar says. Studley officials declined to comment on the team’s departure.

Farrar says that he and the rest of the team “really struggled with the decision to leave Studley,” but he says that the team found the opportunity to open a new brand in Los Angeles too enticing to pass up. Kluth comments that “the opportunity to open a Downtown Los Angeles office with the rest of our team for a major tenant rep brand like UGL Equis” was something that comes along “once in a lifetime.”

In addition to Farrar and Kluth, the other brokers in the new UGL Equis office are senior vice president David Kimball, vice presidents Justin Hodgdon and Mike McKeever and associate vice president Aliya Coher. Farrar tells GlobeSt.com that the new shop will operate in what is perceived as a landlords’ market at a time when well-financed building owners “can afford to endure vacancies to meet their pro formas” and are pushing rents to new heights.

“We as tenant advocates are under more pressure to really provide strategies not only to reduce costs, but to determine how to control occupancy costs going forward in these markets,” Farrar says. He cites the dramatic rise in rents in some Westside markets, where at least one deal has been recorded at more than $6 per sf per month just a few years after the top rent in the same market was only $3.50 per sf per month.

Kluth points out that, “the Westside markets and Santa Monica are somewhat of an anomaly” because landlords there can demand high rents from tenants, such as entertainment and media firms, that are determined to stay in those places to maintain a certain image or to be near concentrations of other firms in the same industry. Nonetheless, there is upward pressure on rents throughout the region because the industry is in the midst of an up cycle right now, Kluth adds. He notes that some tenants are willing to move to save money, including some that have moved out of the Westside and south toward El Segundo.

The soaring Westside rents are one sign of a strong office leasing market in the Los Angeles Metro area, which is one of the reasons UGL Equis is expanding here, according to Sheinkop. He tells GlobeSt.com that the firm would like to have an even greater presence here.

“We certainly would like to have a bigger presence in Orange County, and we would love to be more active in the Inland Empire,” Sheinkop says. However, Sheinkop adds, the firm is very careful about finding the right people before it expands.

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