- National's Role : Investor/Co-Developer
- Investment Type : Equity
- Status : Redevelopment
- SF - quote usable SF : 2 million SF
- Property Type : Mixed-Use
Built in 1973, 700 S. Flower consists of a 32-story, 708,000-square-foot office building, an enclosed two-story 430,000-square-foot shopping mall (anchored by Macy’s), and a six-level parking structure with 1,966 parking spaces. The full block mixed-use project also contains a 496-room Sheraton Grand hotel. In 2013, National on behalf of it's open-end, commingled fund and The Ratkovich Company, a local developer, purchased the property for $181 million and rebranded the site as The Bloc. At purchase, the office building was only 56% leased and the retail component, anchored by Macy’s, suffered from a lackluster mix of tenants and dated design. The Sheraton required extensive refurbishing to be competitive against new hotel product.
Transforming into a 24-hour district with expanding population base, the downtown LA real estate market is undergoing a renaissance, spurred by new residential activity, entertainment venues, cultural amenities, and sports facilities. The Bloc is well-positioned to participate in the revitalization with its prime location centered between the financial and civic district to the north and the Staples-Convention Center to the south as well as apartment tower construction nearby.
A comprehensive $360 million re-development of all components includes:
- Reconfiguring existing retail space into a California-style shopping experience with open-air roof and a vibrant mix of retail tenants; turning the Macy’s into a flagship store; and attracting higher-end retail tenants
- Renovated the office tower lobby and common areas to bring a Class B property into a Class A, creative-leaning, contemporary office product
- Upgraded the Sheraton with extensive room and common area improvements
The Bloc also will benefit from a direct connection to the 7th Street subway station from the retail plaza.
The Sheration renovation completed in October 2015 and received a new designation as a Sheraton Grand in April 2016. The open-air retail plaza and renovated office lobby opened in July 2015. New retail and office tenants will continue opening through 2017.