Two Tower for LA - Korean Air will build $1 billion project in Los Angeles

Korean Air and Thomas Properties Group Inc. have announced plans to develop a $ 1 billion mixed use complex in downtown Los Angeles that will transform the city’s skyline and be a symbol of civic pride for the city’s Korean community, the second largest outside of Seoul.The downtown Los Angeles’s first office high-rise since 1992, to capture rising demand after the U.S. recession. Korean Air has owned the hotel and the land since 1989.

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Developed by Thomas Properties Group and designed by Los Angeles based A.C. Martin, the 1.75 million-sq ft project calls for two high rise towers.A 60-story office tower with 1.15 million square feet (107,000 square meters) of space and a 40-story hotel with as many as 700 rooms.“It’s reasonable to assume that the credit market will get fixed and start flowing again,” Thomas Properties Chief Executive Officer James A. Thomas said in an interview. “The ideal timing is to get everything lined up, and as you come out of the recession, you have the product to deliver. So I think our timing is really superb.”

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The Los Angeles metropolitan area had about $7.5 billion in distressed properties as of the end of March, a 168 percent jump from December, according to data from Real Capital Analytics. While the economy is still in turmoil, the development process in Los Angeles is archaic and thus lengthy.
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In making the announcement now, Thomas Properties, which has extensive experience building complex projects in the city, is positioning itself to be first in line when the rebound occurs. Jim Thomas, CEO of the development company, told the LA business journal that with its current 88 percent office occupancy level, downtown will need a Class A office building in the next three to five years. To meet that timeline we need to get started right now, Thomas said.

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Korean Air and Thomas Properties said they expect financing will be available by the time construction begins in 2011.

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