Driven by the need to attract new office tenants, Union Bank Plaza is getting a $20M facelift. KBS officials said the company would start construction and renovations on new features and amenities for the 40-story skyscraper in downtown Los Angeles later this month.
“Offering easy access to both phenomenal entertainment and key transportation routes, UBP has the location and the energy that so many commercial tenants are looking for,” KBS Senior Vice President and Asset Manager Tim Helgeson said in a news release.
“We could not be more excited about the opportunity to add value in the area.” KBS’ move highlights the growing need for office owners to update and renovate their old buildings to attract today’s tenants seeking open-office layouts and high-end amenities.
Across the nation, office developers and owners are in an amenities race to lure tech and other tenants. In Texas, Hines and Ivanhoé Cambridge are developing the Texas Tower, a 47-story, 1M SF office tower in Houston that will feature a high-end gym, cold storage lockers and indoor/outdoor gardens.
In New York, office owners are offering several amenities, including open layouts and cafés. There is a catch. With construction costs rising, the price of tenant improvements are skyrocketing much faster than the rents the space can generate, according to Real Capital Markets’ 2019 Office Investor Sentiment report. KBS acquired Union Bank Plaza from Hines for $208M in 2010, according to CRE data site Reonomy.
Built in 1967, Union Bank Plaza at 445 South Figueroa St. is one of the oldest buildings in downtown. The office property consists of a 677K SF, 40-story office tower, a 24,800 SF two-story retail plaza and a 914-spot four-story parking garage. The property spans a full city block and sits adjacent the entrance of the I-110 Harbor Freeway and Westin Bonaventure hotel.
“Union Bank Plaza is the type of property that literally could not be built today,” Helgeson said. “The property strategically connects the Bunker Hill business district with the burgeoning Figueroa Corridor.”
The last time the building was renovated occurred sometime in the 1980s, Cushman & Wakefield General Manager Vicki Conrad told Bisnow.
The office building is currently 80% occupied, she said. “This is a good time to jump in here,” Conrad said. The renovations will feature a new look for the retail plaza, a new lobby, an outside garden, an indoor/outdoor conference center, more elevators, bike storage, electric car charging stations and more.
Eight office suites featuring an open layout with some closed offices, exposed ceilings and high-end finishes are under construction. Two have already been pre-leased, KBS officials said. KBS has tabbed HLW International as the architect. Swinerton Builders is leading construction.
“The innovative and progressive design strategies employed here seek to transform Union Bank Plaza, celebrate the history of the space, and enhance the tenant experience through a re-imagination of the amenities and extensive outdoor environments,” HLW LA principal and Managing Director Mark Zwagerman said in a news release.
The renovations are expected to be complete by next year. Cushman & Wakefield’s Justin Collins, Pete Collins and Kelli Snyder will serve as exclusive office leasing agents for Union Bank Plaza.