The long-awaited Red Building at the Pacific Design Center is proving a hard sell due to high asking prices and a lack of demand from the right tenants, according to the Los Angles Business Journal (sub. req'd.). The 400,000 square foot building is still without tenants, just a couple months before its April opening. Cohen has been hoping to attract "large high-profile media and entertainment companies," but Michael Ross, senior vice president of investment properties at Grubb & Ellis Co. says owner Charles Cohen is asking about $1 to $1.50 over the highest rents on the market. To make matters iffier, Cohen just switched to LA Realty Partners, its third brokerage in two years. Prior brokers couldn't make the sale to coveted industry folks--for instance, United Talent Agency and William Morris Endeavor both passed on the property.
Although Cohen has shown himself more willing to abandon brokers than his business plan, he also has the flexibility to do so. Jonathan Larsen, executive managing director at Transwestern in Downtown Los Angeles, tells the LABJ that Cohen can afford to be without tenants until after the building is complete, at which point selling potential lessees might be easier (some call it flexibility; others call it vast sums of money).
Cohen's new brokers at LA Realty, meanwhile, recently said that "it is open to offering leases as small as 20,000 square feet for a desirable company." Deals for combined space in the Red Building and the Green Building (for about $3.50 per square foot) will also be considered.
Cohen bought the Pacific Design Center in 1999 and paid $165 million to build the third and final piece of architect Cesar Pelli's vision for the complex at San Vicente and Melrose boulevards in West Hollywood.
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