Fox Family Seller Saban Inks Century City Lease Deal
Real Estate
by Danny King
Haim Saban’s latest entertainment venture is moving in where the Love Boat sailed out.
The entertainment mogul’s newest company, Saban Capital Group Inc., flush with $1.6 billion from the sale of his share of the sale of Fox Family Channel to Walt Disney Co., has signed a lease for 24,000 square feet at 10100 Santa Monica Blvd. in Century City. The 10-year deal was valued at less than $15 million, according to Todd Later, director of marketing for Hines Interests, which represented the landlord on the deal.
Saban, who was represented by Les Small & Co.’s Les Small, will occupy the top floor, one of five floors vacated by Princess Cruises in May. He will not, however, have building-top signage at the 26-story building, as he did when Saban Entertainment Group moved into 10960 Wilshire Blvd. in 1992. Signage rights at that building passed to Disney in the Fox family deal.
Saban is paying a pricey $4 a foot for space at a 30-year-old, 606,000-square-foot Century City building, according to Westside real estate sources.
“It’s a very favorable deal for the landlord,” said one source. “You could make a deal at Constellation Place (the 700,000-square-foot Century City project to be completed in mid-2003) for that same rate.”
Conversion Diversion
Add one more to the list of historic downtown buildings being converted into residential units.
The 195,000-square-foot Arcade Building, between 5th and 6th streets and running the full block between Broadway and Spring Street, will be redeveloped into 142 loft-style apartments. The building, which also has 35,000 square feet of retail space on the ground floor, is owned by Fifth Street Funding Inc.
The Fifth Street Funding principals, who would only speak on condition their names not be used, have owned the property for about a decade.
“There seems to be a market for this, and we wanted to take advantage of it,” said one of the principals. The person said the firm would spend $15 million on the project. There are about 3,500 downtown lofts either complete or under construction.
Known as the Mercantile Arcade Building when built in 1924, the building is made up of two six-story structures linked by a three-story arcade. Aside from retail businesses on the ground floor, the building is vacant.
Santa Monica-based Killefer Flammang Architects, which is designing two other loft projects on Spring Street, will be working with independent architect David Denton on the build-out. The market-rate apartments will be completed in late 2003 or early 2004.
World Trade Trade
The World Trade Center and adjoining Hilton Hotel in downtown Long Beach, as well as the undeveloped land surrounding the properties, was purchased by a joint venture between Ensemble Investments LLC and AEW Partners IV LP. The price was not disclosed, but one South Bay real estate source estimated the deal for the buildings at $100 million.
The 12 acres of land beneath and surrounding the two buildings were purchased from the Port of Long Beach for $20.4 million. Financial figures for the sale of the two buildings, for which seller CDI West had a long-term lease with the city, were not disclosed.
“We see downtown Long Beach having great potential with all of the new development on the horizon, especially the 2,000 to 3,000 residential units under construction,” said Kam Babaoff, managing director at Ensemble. “We think that will make it a 24-hour downtown and we wanted to increase our investments here.”
The 550,000-square-foot World Trade Center, which was developed by CDI West-affiliate Kajima USA in 1989, is 85 percent occupied, with lease rates in the $2.10 to $2.20 a foot range. Ensemble owns two other buildings totaling 325,000 square feet in the downtown area.
Calabasas Passes
Los Angeles County’s best performing office market could be getting another boost.
Countrywide Credit Industries Inc. is shopping for 150,000 square feet in the San Gabriel Valley, according to local real estate sources. The Calabasas-based mortgage lender, which has more than doubled its employee base in Los Angeles County over the past five years, is looking at about a half-dozen sites.
Potential sites include the 200,000-square-foot Rosemead building Chicago Title Co. vacated after merging with Fidelity National Title, and a building at Flair Business Park in El Monte. Officials at Countrywide declined comment on the site search.
A deal of the size Countrywide is considering would further bolster a submarket that has defied the region’s softening office sector over the past year. The San Gabriel Valley, which absorbed 222,000 square feet in the fourth quarter of 2001, was the only submarket in the county whose vacancy rate dropped between the third and fourth quarters of last year, according to Grubb & Ellis Co.
Too Good to Refuse
Favorable economics have turned two San Gabriel Valley renters into Inland Empire buyers.
Two buildings totaling 35,000 square feet at Burke Pomona Business Center were sold for a total of $2.4 million. One of the buyers, electronics merchandiser Impaq Microsystems, will be consolidating its Walnut and El Monte operations, while the other, packaging company Unipack Trading, will be moving from the City of Industry.
It’s part of a trend buoyed by low interest rates, relatively cheap purchase prices and new product that is luring small industrial businesses eastward and out of their leases. The $70 a foot paid for the buildings is about 20 percent less than similar buildings sell for in the City of Industry, according to Lee & Associates’ Senior Vice President Chris Bonney, who, with Lee & Associates’ Steve Shatafian, represented the seller on both deals, as well as Unipack.
The industrial vacancy rates for the San Gabriel Valley and Inland Empire during the fourth quarter were 3.5 percent and 7.4 percent, respectively, according to Grubb & Ellis. Both rates were up over year-earlier figures.
“Vacancies are going up, but all of the buildings are being sold real fast,” said Edward Lee, associate at CB Richard Ellis and Impaq representative.
Nine of the 10 buildings at the business park, which was developed by Santa Ana-based Burke Real Estate Group and completed six months ago, have been sold.
Staff reporter Danny King can be reached at (323) 549-5225 ext. 230, or at
[email protected].
