Quake damage forces closure of another 'steel-frame' office tower.

In another piece of ominous news for owners and occupants of hundreds of "steel-frame" buildings, structural engineers have determined that damage from the Northridge earthquake has rendered West L.A.'s Olympic Center office building unsafe in the event of another strong earthquake.

Tenants of the 11-story building were asked to begin vacating it last week -- sending many scrambling for alternative quarters.

The 153,314-square-foot tower at Olympic and Sepulveda boulevards is by far the largest of the steel-frame structures initially deemed to have suffered only minor earthquake damage -- but found to be unsafe several months later through follow-up "ultrasonic" inspections.

And City of L.A. inspectors continue checking for similar damage in welded and/or bolted joints connecting steel beams and columns in hundreds of so-called steel "moment-frame" structures.

They have "yellow-tagged" at least three other previously green-tagged steel-frame office buildings since early June. In addition to two in quake-rocked Sherman Oaks, these include another Westside building -- the Wilshire Centre at 12300 Wilshire Blvd. in Brentwood.

Downtown L.A.-based TCW Realty Advisors manages the investments in the Olympic Center property, Wilshire Centre and the other recently yellow-tagged buildings on behalf of institutional investors. City inspectors, who yellow-tagged those buildings after TCW requested inspections, have indicated that no other owners have come forward with follow-up engineering studies in anticipation of yellow-tagging.

Check-ups may be mandated

The city is now considering a mandatory -- and, owners fear, costly -- inspection program for perhaps 400 buildings on the Westside and in the San Fernando Valley. The evolving ordinance isn't expected to reach City Council consideration until next year.

But the discoveries at Olympic Plaza constitute an immediate threat, some real estate sources suggest.

"We've got one Westside building closed for repairs, and now Olympic Center is also being closed," noted Craig Miller, a commercial real estate broker with The Stone Co. So it's not far-fetched to assume every steel-frame building in West L.A. and Santa Monica has suffered some joint damage, he said.

"No one yet knows if this is actually the case, but I think we can expect more buildings to close," Miller said.

TCW has gained substantial experience in inspecting and repairing structural damage at the other three lately yellow-tagged buildings. In fact, teams recently completed repairs at the Sanwa Bank Plaza in Sherman Oaks and began moving tenants back to the four-story building.

Surprised by severity

But the severity of the problems at Olympic Center -- which had been slated for repairs with tenants still occupying the building -- apparently caught the TCW team by surprise.

Shortly after inspections commenced, TCW's engineers had said the building was "not unsafe to occupy," according to a memo to tenants from TCW Realty Partner/Portfolio Manager Cynthia Leuty. But the most recent tests show a "large increase in fractured connections at the seventh floor through roof level," rendering that portion of the building "more significantly impaired than previously anticipated," the memo continues.

As of Nov. 8, engineers had tested 674 of Olympic Center's 915 joints, or "connections," and found 211 damaged, Leuty's memo states. It adds that TCW has asked building inspectors from L.A.'s Building & Safety department to inspect the property. They may "yellow-tag" all or part of it, typically restricting access to 20-minute trips by small groups, the memo notes.

TCW Senior Partner Richard Grantham noted that as engineers are still inspecting the building, TCW hasn't yet been able to prepare a "meaningful repair plan" or project a timetable for re-occupancy.

Focus on safety

"We know it's a terrible disruption for the tenants and everyone else involved, but our primary concern is safety," Grantham commented. He said the building at 11150 W. Olympic, which includes six office stories above five parking levels, is currently 83 percent leased.

It bears the signage of major tenant Marathon National Bank, which is one of several tenants thought to be negotiating for space at one of the two so-called Executive Life office buildings on Olympic Boulevard just west of Sawtelle Boulevard.

Ironically, the building originally featured co-developer Tishman Realty & Construction Co.'s sign -- with connected steel beam and column representing the "T" in Tishman.

Other sizable tenants at Olympic Center include Windsor Capital Group, City of Hope, the KDOC television station, Breslow Loeb & Associates accountancy and Fonda & Garrard law firm.

Seeking new digs

"The buildings have been full of brokers" representing the displaced tenants, noted Malcolm Hill of Raleigh Enterprises, who handles leasing at the Executive Life buildings. "We're doing what we can to fit them into both our buildings," Hill said.

"Everyone and their brother has been calling," added Bea Martin, who represents the Teleflora Plaza project at 12233 W. Olympic. She also decline to discuss specific deals under negotiation.

Fonda & Garrard, a 22,000-square-foot Olympic Center tenant, had already been seeking an alternative home when TCW sent the notice to vacate last week. The firm quickly negotiated a deal at the 1888 Century Park East tower in Century City, according to the firm's broker, Jerry Porter of Metrospace Corp.

The Stone Co.'s Miller said his client Trillium Digital Systems Inc. had previously considered leasing space at Olympic Center.

But the tenant opted instead to take just over 9,000 square feet at a building Miller said he felt "was safe" -- the six-story Coral Plaza building in Brentwood, also a member of TCW's Westside portfolio.

TCW has also been dealing with connection damage its engineers discovered -- long after the Jan. 17 quake -- at two Sherman Oaks buildings, both about the same size, age and configuration as Wilshire Centre.

After a fast-tracked seismic repair program, city inspectors just gave tenants the go-ahead to return to the Sanwa Bank building at 15165 Ventura Blvd. -- which had been yellow-tagged in early June. In August, city inspectors yellow-tagged about half the offices in TCW's Noble Professional Center building at 15060 Ventura Blvd.

Tenants' return expected

Another initially green-tagged office building, the three-story, 84,000-square-foot Westhills Plaza at 20700 Ventura Blvd. in Woodland Hills, was vacated in September. Davis Partners, which manages the investment in Westhills Plaza on behalf of Boston-based TA Associates Realty, had expected to begin returning tenants to the building late last week.

Grantham noted that TCW carries a "blanket" earthquake insurance policy with an affiliate of Aetna Life & Casualty. He said the insurer has generally been funding losses and cooperating with TCW, but noted that his firm and the carrier are addressing a dispute over the policy's deductible level.

Another immediate "acid test," as Grantham put it, is the lease clauses addressing how much time a landlord has to repair a property and keep lease contracts legally binding on temporarily displaced tenants.

In the Sanwa building's case, the city approved re-occupancy about 140 days after posting the yellow tags. Leases typically give the owner 180 to 200 days to complete repairs, according to legal and real estate sources.

But they've also indicated they expect important precedents to be set in response to disputes bound to arise in such situations.