With sale of Two California Plaza, Bunker Hill is poised for comeback

One of the tallest office buildings in downtown Los Angeles has been acquired by a major Hollywood real estate investor, CIM Group, in an unusual portfolio sale that included a regional shopping center in Montclair, a high-rise in Anaheim and a hotel in Bakersfield.

The crown jewel of the seven properties acquired by CIM Group is Two California Plaza, a prestigious but troubled skyscraper on Bunker Hill where gleaming office towers erected during the last building boom decades ago are having a tough time attracting tenants.

In recent years, the center of gravity for downtown development has shifted a few blocks south, where new housing, bars and restaurants have transformed the financial district all within walking distance of Staples Center and the emerging South Park neighborhood.

But Bunker Hill is poised for a comeback as new owners bring millions to invest in property improvements near Walt Disney Concert Hall and additions including the $130-million Broad Museum come to life, said Shaul Kuba, a principal at CIM Group.

"Bunker Hill already has a phenomenal collection of real estate," including US Bank Tower, the tallest building in the West, he said. "With all the renovation and repositioning that is happening, you will start seeing some serious tenant moves."

As part of the move, CIM plans to jazz up the restaurants and shops in the already-popular courtyard, which lies at the foot of two office towers and the 17-story Omni Los Angeles Hotel.

The encompassing development, called California Plaza, whose courtyard includes elaborate dancing-water fountains, is at the top of the funicular railway Angels Flight. The plaza is also linked to the Museum of Contemporary Art and an apartment tower.

Two California Plaza, 52 stories tall and housing nearly 1.3 million square feet, is considered one of the region's premier office buildings and is home to lawyers, accountants, bankers and other professionals. It is, however, only about 60% occupied.

Office vacancies also trouble US Bank Tower, which is also about 60% leased, and other Bunker Hill skyscrapers that once belonged to MPG Office Trust. MPG was downtown's largest office landlord for many years, but the Los Angeles company went out of business in 2013.

New York landlord Brookfield Office Properties Inc. bought the bulk of MPG's downtown office portfolio, though US Bank Tower was acquired by Singapore investor Overseas Union Enterprise. Now Two California Plaza belongs to CIM Group after it passed through the hands of a Maryland-based manager of distressed properties.

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With sale of Two California Plaza, Bunker Hill is poised for comeback