Yahoo Inc. is negotiating to lease about a quarter-million square feet in Santa Monica’s Colorado Center, according to several sources with knowledge of the discussions.
The 10-year deal could be worth more than $90 million to the office park’s owner, a partnership of Equity Office Properties Trust and New York-based pension fund TIAA-CREF.
Sources said Yahoo executives want to have a deal in place by the end of the month. The Sunnyvale-based company would likely consolidate multimedia subsidiaries from throughout California into the space, they said.
By netting Yahoo as a tenant, the owners avoid a stinging loss when Symantec Corp. moves out of the 250,000 square feet it leases in the office park for a new local office. The company plans to build a project of nearly twice the size in Culver City’s Corporate Pointe. Cupertino-based Symantec’s lease at Colorado Center runs out in 2007; construction of its new local offices presumably would be complete by then.
Meantime, Yahoo would start by leasing space that’s now available in Colorado Center and then slowly expand as leases expire until the rest of the space opens up.
By filling more than 20 percent of the complex, the deal would nearly guarantee the office park will be close to full occupancy for the next decade.
Equity Office Properties spokeswoman Paige Steers declined comment, as did Gerald Porter, vice chairman with CRESA Partners, which is representing Yahoo in the deal.
The Equity Office/TIAA-CREF partnership purchased the 1.1 million-square-foot complex earlier this year from Tishman Speyer Properties Inc. for $443.6 million a price some considered high even for a trophy Westside property.
Besides Symantec, other large tenants in the complex include Time Warner Inc.’s Home Box Office Inc., advertising agency Rubin Postaer and Associates and the home video division of Metro-Goldwyn-Mayer Inc.
Yahoo has also been active in the L.A. region. The company’s Overture Services Inc., which pairs advertisers with Internet search engine results, inked a $100 million lease with developer M. David Paul & Associates for a build-to-suit headquarters in Burbank’s Media Studios North office park.
Tuning In
With a $93 million offer, Arden Realty Inc. has won the bidding on the former ArtistDirect building at 5670 Wilshire Blvd. now home to several radio stations.
The 27-story Miracle Mile tower was put on the market in September by a partnership formed by J.H. Snyder Co. and Goldrich & Kest Industries LLC.
If the deal goes through, Arden will be paying $228 a foot for the 408,000-square-foot building. Arden is going through its due diligence and sources warned the deal could fall apart, though it isn’t likely.
The price offered by Arden would top the $202 a foot Tishman Speyer paid for the 370,000-square-foot, 21-story tower at 6300 Wilshire in August.
However, Arden is buying a building that is 95 percent occupied and has newly signed 10-year leases for 60,000 square feet with several Infinity Broadcasting Corp. radio stations.
Viacom Inc., Infinity’s parent company, leased another 35,000 square feet in a 15-year deal. As part of the lease, the building’s ArtistDirect signage will be replaced by the names of the radio stations.
Other tenants include the Securities and Exchange Commission and Singapore Airlines Ltd. Last year, five penthouse apartments, renting for between $4,000 to $6,000 apiece, were added to the building’s top two floors.
Secured Capital Corp. had the listing on the 41-year-old property, which was the former headquarters of California Federal Savings & Loan. In the early ’90s, CalFed moved across the street to the Wilshire Courtyard project it helped finance. (The bank has since been purchased by Citigroup Inc.)
For a time, the building was the headquarters of dot-com-cum-record company ArtistDirect Inc., which after a series of downsizing moves left last year for Westwood. Arden spokeswoman Brooke Lauter declined comment. Calls to Secured Capital and J.H. Snyder weren’t returned.
Roomy Deal
Core Capital Advisors Inc. has established a partnership with investor Goodwin Gaw, president and founder of Downtown Properties Holdings, in a $40 million deal for three hotels with a cumulative 586 rooms.
In Los Angeles County, the partnership purchased the 199-room Four Points by Sheraton at 5590 Green Valley Circle in Culver City and the 149-room Four Points by Sheraton at 700 W. Huntington Drive in Monrovia. The third hotel is a 235-room Four Points by Sheraton in San Rafael.
The hotels were part of 14-property package put on the market by Barcel & #243; Crestline Corp., the U.S. arm of Spanish hotel and resort owner Barcel & #243; Corporaci & #243;n Empresarial.
Using funds from private investors, Core Capital Advisors buys hotels, renovates and repositions the properties, and typically resells in a five-year period, according to Troy Shadian, one of the West L.A. firm’s partners.
The four-year-old company already owns seven hotels and has sold five properties.
“We try to capture the opportunity of the market and take advantage of the recovery going on in the hotel market right now,” Shadian said.
Through the partnership with Gaw, Shadin said the firm will purchase 10 more hotels over a two- or three-year period.
Back to the Chalkboard
TIAA-CREF has decided to sell its 111,453-square-foot Promontory Office Building in Culver City.
The New York-based pension fund has retained Grubb & Ellis Co.’s Kevin Shannon to market the property, which is fully leased to six tenants. Brokers believe the four-story building, located at 5901 Green Valley Circle, could fetch about $22 million or about $200 a foot.
Staff reporter Andy Fixmer can be reached by phone at (323) 549-5225, ext. 263, or by e-mail at
[email protected]
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