The Swig Company is following the trend of many office owners in Downtown L.A. — it wants out.
The San Francisco-based investment firm has listed 617 West 7th Street, a 215,000-square-foot office building near Pershing Square, according to marketing materials for the property.
A team led by JLL’s Andrew Harper is offering the property for sale. Swig did not respond to a request for comment.
Swig is pitching the building as a prime candidate for a partial conversion into a residential property, advertising that the property could qualify for historic tax credits and would benefit from L.A.’s adaptive reuse ordinance.
That ordinance allows developers to convert vacant or underutilized buildings into other uses by-right, that is, without the need for formal rezoning applications. The ordinance applies to Downtown L.A.
The property is currently 39 percent leased, according to JLL’s marketing materials.
One issue for potential buyers looking at redevelopment is the building’s long-term leases. Walgreens, which occupies about 16,000 square feet, has a lease that expires in 2084.
Part of the building could be converted into residential units while the long-term leases are in effect, JLL said. However, partial conversions are often quite complex.
For the ideal residential conversion, a building would be entirely empty, according to brokers, developers and architects, meaning in this scenario, a future owner would have to buy out the tenants.
Swig bought the building, located on the corner of South Hope Street, for $38.8 million in 2011, records show. In 2018, Swig refinanced the building with a $25 million loan from HSBC Bank.
