October is proving to be quite a month for Downtown’s Arts District. First, Warner Music’s lease at Shorenstein’s Ford Factory became more than just a rumor. Now, a major institutional office owner is getting ready for its neighborhood debut.
Tishman Speyer is in contract to buy Hyperloop One’s four-building headquarters at 2145-2161 Sacramento and 2136-2159 Bay Street, sources told The Real Deal. It will pay the sellers, Lion Real Estate Group and Mark Borman, roughly $25 million, or $662 per square foot, for the 37,785-square-foot campus in a deal that is expected to close next week.
Tishman’s plans for the site are not yet known. However, sources said zoning in the area would allow the firm to build a denser campus, potentially removing one of the industrial buildings and replacing it with a taller structure. The buildings sit on a 74,000-square-feet lot. Hyperloop uses the outdoor space as its tinkering area as it works to develop a lightning speed transportation network — the vision of Elon Musk. The company has several years left on its lease, though the exact lease length is not known.
John Zanetos of CBRE is representing both the buyer and the seller in the deal, sources said. He could not be reached for comment.
Lion and Borman acquired the two parcels that comprise the site in different transactions totaling $7.8 million, according to CoStar. The partners bought the Sacramento side for $3.1 million in August 2014, and the Bay Street side for $4.7 million in 2015. They gave the site an extensive renovation, recently erecting two parking risers.
Mark Borman and Lion Real Estate Group declined to comment. A representative of Tishman Speyer could not be reached.
Lion and Borman have partnered on several renovation projects in the Arts District, and recently sold one for a per-square-foot rate that is almost identical to Hyperloop’s pricetag. After a makeover and lease-up, they sold the retail and office buildings at 2014-2020 and 2028 East 7th Street for $665 a square foot.
Tishman owns a portfolio of properties throughout Los Angeles, including complexes in Miracle Mile and Hollywood. This is its first venture in the Arts District.
This week, Hyperloop One announced that it received $50 million in a funding round from DP World Group of Dubai. The company also hired former Uber CFO Brent Callinicos as a full-time strategic advisor.