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Thursday, December 12, 2013
Developers see Pasadena as an inland version of Silicon Beach
Entrepreneur David Sacks and Rising Realty have bought three
century-old buildings in Old Pasadena and plan to transform them into a
hub for tech start-ups.
Christopher, left, and Nelson Rising purchased a three-building complex
at Raymond Avenue and Holly Street in Pasadena. “We’re bringing density
of tech use to Pasadena,” said Nelson Rising, CEO of Rising Realty.
“There’s not a lot of density there now.”
Historic Old Pasadena, a restored section of the city's downtown bustling with shops and restaurants, is getting more high-tech.
Three older buildings at a
busy intersection on Raymond Avenue will be transformed into a hub for
budding technology firms in a real estate development backed by a
prominent Silicon Valley entrepreneur and investor.
who was instrumental in the launch of two $1-billion Internet
companies, has joined Los Angeles developer Rising Realty Partners in a
project to turn three century-old buildings into offices for tech firms.
The builders hope to spur
more young tech businesses to set up shop in Pasadena, which has a long
history as a center of science and technology but trails the Westside's
Silicon Beach as a magnet for high-tech start-ups.
"We're bringing density of tech use to Pasadena," said Nelson Rising,
chief executive of Rising Realty. "There's not a lot of density there
Rising Realty and Sacks paid $10.4 million for the three-building
complex at the southwest corner of Raymond and Holly Street. The sellers
were Cambra Realty and Angelo Gordon & Co.
The buildings in the complex formerly known as Old Pasadena Plaza
were erected between 1895 and 1914 in the city's original commercial
There is one nine-story tower and two smaller structures that house restaurants Cafe Bizou and Chado Tea Room.
Past uses of the buildings include an automotive repair shop and a
mortuary, according to Rising Realty. The tall tower was a storage
facility for decades.
The yet-to-be-named tech center is set to open next summer after a
multimillion-dollar renovation to substantially boost the property's
Internet capacity and speed. Wi-Fi service will extend across Holly
Street to Memorial Park so tenants can work outdoors if they wish.
There will also be a "co-working" office where individuals can rent space to work in a shared environment.
"The basic idea is to make it as easy as possible to get
entrepreneurs started and then graduate to their own space," Sacks said.
He has experience getting tech companies started. Sacks was the
founding chief executive off Yammer, which was acquired by Microsoft
Corp. in 2012 for $1.2 billion. He was the first chief operating officer
of PayPal, which was acquired by EBay Inc. in 2002 for $1.5 billion.
He was also an early investor in such notable tech companies as Facebook Inc., Twitter Inc., Uber, Space Exploration Technologies Corp., Palantir Technologies, Houzz Inc. and Airbnb Inc.
A mutual friend introduced Sacks to Nelson and Christopher Rising, a
father-son development team that is also transforming the historic
PacMutual office complex in downtown Los Angeles into a center for
Sacks' role in the Pasadena project will be investor and co-developer.
"It's fun to have a vision of what a building could be and then
transform it," he said. "That's what we do in the start-up world as well
— have a vision of something that doesn't exist and then try to create
Pasadena is a tech hot spot but doesn't really compete with Silicon
Beach for businesses, said real estate broker Tom Majich of Industry
Partners, who was not involved in the deal.
"The Westside has a lot of consumer tech" companies such as Google
Inc., Snapchat Inc. and YouTube, he said. "Pasadena is more industrial
tech with research coming out of JPL, Caltech or the Art Center College of Design."
The Jet Propulsion Laboratory, Caltech and tech incubator Idealab
have already helped spawn more than 311 companies in Pasadena, according
to local advocacy group Innovate Pasadena.
With those institutions and the shops, restaurants and housing, Old
Pasadena is poised to incubate more start-up businesses, Majich said.
"A lot of people say Pasadena is a bit disconnected from Westside
tech as a negative, but it's a totally different market," Majich said.
"The goal is to not drag Snapchat from Venice. It's to develop new
Christopher Rising said monthly rents at the new complex will run
from about $2.35 to $2.50 a square foot, which is similar to rates
charged at other office buildings in Pasadena.
He plans to expose the old brick walls and ceilings, moves that are
popular with a lot of technology and creative companies that don't like
traditional office space.
The complex is near a stop on the Gold Line rail service, which
connects Pasadena with downtown Los Angeles and is set to be extended
east to Montclair. Work is also underway on extending rail service from
downtown L.A. to Santa Monica.
"By 2015," Rising said, "you will be able to take the train from Pasadena all the way to Silicon Beach."