Two recent lease deals at a Brand Boulevard high rise in Glendale may signal the beginning of a rebound for an office market that pales in comparison to its neighbors.
The deals have been signed at 505 N. Brand Blvd., an iconic, red-and-white checkered 320,000-square-foot office high-rise that has been part of the Glendale skyline for over 20 years.
HSBC USA Inc. has signed a 10-year lease for 5,000 square feet at the 16-story building. The bank will open a retail branch on the ground floor and will move into the space next month.
The lease was valued at $2.8 million, said John McAniff, managing director at Jones Lang LaSalle Inc., who represented the building owner, a British pension fund advised by LaSalle Investment Management (a wholly owned but operationally independent division of Jones Lang LaSalle Inc.)
“Glendale has shown itself to be the weakest of the Tri-Cities markets,” McAniff said. “With that said, the market in Glendale is starting to firm up and we have seen good leasing activity of late.”
Glendale languished with a 16.2 percent vacancy rate in the fourth quarter, while Burbank whose media district is red hot had a 3.6 percent vacancy rate and Pasadena a 4.7 percent vacancy rate, according to data provided by Grubb & Ellis Co.
In the other deal, UnitedHealthcare has signed a lease to expand on the 5,400 square feet it currently occupies. The $2.8 million, five-year renewal bumps the company up to a total of 22,800 square feet.
“Those two recent lease announcements are the best news Glendale has had in the past 12 months,” said Bill Boyd, an executive vice president with Grubb & Ellis Co. who has leased Glendale office space since 1981. “That is an encouraging signal that maybe Glendale has turned the corner and is heading in the right direction.”
Jones Lang LaSalle’s Chris Dillavou also represented the building owner in the deals. HSBC was represented by Gary Goodgame of Corporate Realty Associates Inc. and UnitedHealthcare was represented by Steve Sapunor of Corporate Realty Associates and Karen Johnson of Trammell Crow Co.
West Hollywood Decision
The West Hollywood City Council gave final approval Feb. 20 for the new Greenwich Place residential development.
Construction on the $140 million market-rate condo and affordable rental unit project is slated to begin in the third quarter of this year, said Brian Lewis, spokesman for developer Regent Properties.
The development is moving forward after the City Council voted unanimously to approve a zoning change for the project, allowing its 35 affordable housing units to be situated entirely in one building. This goes against code in West Hollywood, where affordable rental units are required to be dispersed throughout developments.
“The affordable units are in one building so they can get a level of services they would not receive otherwise,” said Lewis, adding that the affordable housing tenants will have communal meals and access to social service providers.
He said the project was approved with the zoning amendment because of the level of services that will be provided to affordable housing tenants. Despite some concerns, Lewis maintained the tenants in the five-story affordable housing building will not be “ghetto-ized.”
The Greenwich project will consist of four buildings on a three acre site bounded by Beverly and San Vicente boulevards and Sherbourne Drive. It will include 117 market rate condos, with construction slated to take 18 months. Brentwood-based Regent had been working on getting the project approved by the city for about two years. The developer is now searching for a nonprofit organization to manage the affordable housing.
Let’s Do Lunch
The Ivy, the venerable entertainment industry lunch spot, has a lot of pull so much so it has prompted the signing of a lease.
New Line Cinema, a Time Warner Inc. subsidiary, has signed a 10-year restructured lease to remain at the Pacific Theatres Building. Located at 116 N. Robertson Blvd., the nine-story building is across the street from the Ivy and near Chaya Brasserie, another industry haunt.
“No entertainment company has greater proximity to these industry haunts than New Line,” said Mark Sullivan, regional manager for Studley Inc., who represented New Line in the $27.5 million deal with landlord Robertson Properties Group.
With the lease, New Line is expanding its space in the building by about 8,000 square feet for a total of 66,000 square feet spread over several floors. The initial rental rate is in the low $3 per square foot per month range, according to a real estate expert with knowledge of the area. “I think we made a deal that is a bit better than market but the deal stands up well to market,” Sullivan said.
New Line plans to make improvements and upgrades and move in by late summer. The offices serve as New Line’s Los Angeles headquarters. The lobby also will be renovated.
Studley’s L. Craig Lemle also represented New Line. Robertson Properties represented itself in-house.
Staff reporter Daniel Miller can be reached at (323) 549-5225, ext. 263, or
[email protected]
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