California Apparel News

The Gerry Building, one of the principal showroom buildings in the Los Angeles fashion district, has been up for sale for less than a month, but already offers are pouring in.

The building’s current owners, LaeRoc Partners in Hermosa Beach, Calif., put the nine-story historical structure on the market in mid-May with no asking price listed. LaeRoc Partners bought the art deco building, with large curved windows, in 2005 for $14.5 million from MJW Investments, headed by Mark Weinstein.

But commercial property in the area still hasn’t returned to the boom-boom years of real estate that peaked in 2007.

One of the bidders for the structure is Shawn Far, who owns a three-story building located at 200 E. Ninth St. It is right next door to the Gerry Building.

Far, who is also a garment manufacturer, appreciates old buildings that have unique architectural details. He owns a historic 12-story structure at 1200 S. Santee St. in the fashion district. “The Gerry Building is a beautiful building and a beautiful location,” said Far, who is owner of the U.S. Apparel Group, which manufactures women’s clothes under the Vertigo label. He also has the license to produce Playboy activewear under the Playboy Sports label.

Far said he envisions linking his Ninth Street building to the Gerry Building by cutting a hole in the wall and putting in a passageway between the adjoining structures. He also would paint the Gerry Building white. “Right now it looks like a fire station,” he said of the terra cotta edifice constructed in an arte moderne style in 1947. He would also try to enlarge the small lobby, whose size, he feels, is not appropriate for the large building.

Far said he was contacted by the listing broker, David Muir of Daum Commercial, about purchasing the building.

Muir said he has had a number of offers for the Gerry Building, which he considers a good buy because it is in a prime fashion-district location.

“We have seen quite a bit of activity [in offers],” Muir said. “The goal is to get an initial round of offers in the first 30 to 45 days and weed out the top three buyers, and then we will respond and select a buyer,” Muir said.

According to the building’s listing, the 108,220-square-foot structure is 73 percent occupied. Most of the tenants are showrooms. Recently, the entire third floor was leased out as offices and a showroom to Naven, a Los Angeles contemporary line of womenswear owned by Alexis McCoy.

The listing also notes that the building’s annual gross income for 2013 is projected to be about $1.4 million with $530,069 in operating expenses. Net operating income is $889,079.

There was a time when LaeRoc Partners wanted to convert the building into showroom condominiums that could be bought. The company obtained entitlements to do the showroom condominiums, Muir said, but the idea never took off.

With that in mind, tenants in the building are nervous about what kind of changes might take place with a new owner. “It is a little scary,” said Sarah Kirakossian of the Arlene Henry Sales showroom, which moved to the building at the end of 2010 after several years of having a showroom across the street in the California Market Center. “Will they convert it into condos?”

Ellie Frank, who has had a showroom in the Gerry Building for three years, thinks it would be a shame to change the structure’s character. “The building is now getting started [with lots of showrooms], and I would hate to see that momentum die,” she said.

Real estate revs up

Now that the real estate market is getting hotter, a number of commercial buildings in and around the fashion district are going on the market or have been sold. The historic Los Angeles Stock Exchange Building at 618 S. Spring St. is up for sale for an undisclosed price.

The 13-story Commercial Exchange Building at 416 W. Eighth St. was built in 1904 and has 110,000 square feet of space that have been vacant for some time. The building is on the market for $13.9 million. And the Case Hotel, a 13-story former hotel at 1105 S. Broadway, is being offered at $13.5 million. The 1923 structure, which the city at one time wanted to convert to senior-citizen housing, was on the market in 2011 for $11.8 million.

But not everything is fetching top dollar. In April, the Primrose Design showroom building at 833 S. Spring St. sold for

$8.8 million, down from its $10 million asking price. And a mixed-use building at 801 S. Los Angeles St. sold last November for

$5.9 million, down from its $6.9 million asking price.

Currently, buildings in the fashion-district area are selling for $60 to $125 per square foot, depending on their condition and location.

The Gerry Building was listed in the National Register of Historic Places in 2003. It was designed by architects Maurice Fleishman and Herbert Aldon for the Gerry family.

The building opened in 1947 as headquarters to lingerie and dress company Gerry of California. For many years, the structure housed manufacturers and garment-related companies.

Weinstein acquired the Gerry Building in 1998 as part of a 10-building package deal for $18 million with the Arthur Gerry family. Part of that package was a group of industrial buildings, which were converted into a residential village now called Santee Court and Lofts.

Weinstein gutted the Gerry Building’s interior and converted it into showrooms in 2002.