Call it an extreme makeover, property firm edition.

The company that was once downtown L.A.’s largest private landowner has changed its name, management team and entire business strategy, completely reinventing itself since emerging from bankruptcy last year.

It’s not a finished product, though. Evoq Properties Inc., formerly known as Meruelo Maddux Properties Inc., is still cleaning up from its past by selling off some properties and working down its debt. It’s now looking to the future; it plans to convert some of its downtown buildings into creative office space and is looking to partner with developers to build residences on its land.

“We’ve made good progress and are open for business,” said Chief Executive Martin Caverly.

At its peak, Meruelo Maddux had 55 properties including land, with plans to build several apartment towers and buildings in downtown and beyond. But after expanding rapidly, the company was hit especially hard when the markets crashed. It was forced to file Chapter 11 reorganization in 2009.

The company looks like it’s on the way back. It has sold seven office buildings, mostly outside of its core downtown market, to help pay down more than $130 million in debt this year.

Total debt, which was once more than $368 million, is now about $238 million. It has at least two more buildings on the market that will bring in some profit.

It has also undertaken a multimillion-dollar remodel of its centerpiece property, a four-building, 1.5 million-square-foot industrial complex called Alameda Square at 777 Alameda St., the headquarters of American Apparel Inc. Evoq is turning the industrial buildings into the sort of creative office space that is favored by tech, media and design companies.

Clothing brands Splendid and Ella Moss, both units of VF Corp. in New York, and L.A.’s Groceries Apparel recently signed leases to move their respective headquarters to the property from their other L.A.-area locations.

Mark Tarczynski, executive vice president at Colliers International downtown, said the leases are evidence that the company’s new strategy might be working, thanks to good choices and a rebound in the economy.

“They are certainly making what seems to be some of the right moves,” he said. “I think they are still in the weeds a little bit but vastly improved, and that’s been because of the market turnaround.”

Boom and bust

Meruelo Maddux built a vast property portfolio over the last two decades. The company went public in 2007 with a $400 million IPO. It continued to expand with acquisitions and plans to build apartment towers in the downtown area during the real estate boom. But after 2008, the company was crushed by debt.

The company went through a torturous 28-month bankruptcy that ended with a reorganization plan led by Charlestown Capital Advisors in New York. Founders and namesakes Chief Executive Richard Meruelo and President John Maddux were ousted. All other board members left, too. Caverly, a former real estate private-equity investor, was named CEO and a new board formed a new management team.

Among the first orders of business was changing the company name to symbolize the new beginning. It is pronounced like “evoke.”

“ ‘Evoke’ means to bring forth and we are going to bring forth the potential of these assets,” Caverly said. “It was important for the market to know there’s new management in place and we really wanted to refocus people’s interest in downtown and what we contribute to downtown.”

Its stock traded on the Pink Sheets in 2009 and 2010 for as little as 15 cents. Shares were trading on the over the counter market at about $3 last week, but that’s still a long way from 2008’s $25 mark. The company posted a net loss of about $60.3 million last year.

New strategy

Evoq plans to focus on the downtown area, bounded by the Los Angeles River and the three freeways. Today, Evoq owns 30 core properties that it intends to hold long term, mostly in South Park, Chinatown and the Arts District. Last year, it had identified more than 20 properties it could sell to bring cash into the company and right-size its portfolio.

The sale of those properties benefits the company in two ways. It concentrates the company’s holdings downtown and generates cash to pay down debt.

“We aren’t distressed sellers, but we are systematically marketing them, selling them through a process, and bringing that cash back and recycling it to new assets,” Caverly said.

It began by selling properties that were mostly purchased during the expansion years in Covina, Sylmar and other outlying areas, netting $54 million so far.

But it is also selling off some higher-value properties in its target area of downtown strictly to settle its debt. In July, it sold off the 92-unit Union Lofts for nearly $34 million. After announcing a complete renovation of its Desmond Building, a 78,500-square-foot property at 11th and Hope streets, into creative office space, the company recently put that property on the market.

Paul Brindley, senior managing director at mortgage banking firm HFF downtown, who has done business with Evoq, said the new strategy is a smart move for the company.

“They’ve brought a focused institutional mindset to the business,” he said. “They are clearly focused on a core strategy and I think it makes a lot of sense. There’s a lot of value in the assets they have on the books.”

Evoq owns several parcels of land, many of which were entitled or had plans for development by Meruelo Maddux. But unlike the previous company, Evoq has no plans to develop properties itself. Instead, it is hoping to partner with developers to build residences using new plans, Caverly said.

It plans to select properties, plans and partners for development within the next year, and begin the entitlement phase after that.

Of the downtown buildings still owned, Evoq is hoping to capitalize on a growing trend toward creative office space.

The multimillion-dollar conversion to creative space of its centerpiece property, Alameda Square, is expected to help the company begin generating more rental revenue from increased occupancy and rates. It hopes to lure creative companies, such as those on the Westside where growing tech and media companies are firming up the market, with affordable rates and large 40,000-square-foot open-floor plans.

The company wouldn’t disclose rates, but said its downtown creative office space rates are about 30 percent less than the Westside’s $4-a-square-foot rates.

John Zanetos, a first vice president at CBRE Group Inc. who holds the listing for Alameda Square, said that the new clothing companies’ leases are only the beginning. He has been touring taking creative companies on tours through the building at least once a week for the last couple of months, a sign of strong interest in a building.

“I don’t think the company of a couple years ago would take the approach and vision they have for Alameda Square,” he said. “They have an opportunity to capture a lot of the demand for a creative, collaborative atmosphere.”

Evoq is still in its first phase of reinvention, and Caverly expects the company’s at least two years away from paying down most or all of its debt.

But the changes that the company has displayed are being welcomed by the downtown community, which was growing disappointed with its undermanaged and unattended properties.

Carol Schatz, president of the Central City Association, said she is pleased with the improvement she is witnessing in the company.

“I couldn’t be more delighted with Marty and his team,” she said. “He really cares about downtown and that helps us create a community that thrives and is improving on a daily basis.”