Santa Monica developer and landlord Watt Cos. has kept a large and longtime tenant at Watt Plaza, its twin-tower Century City office development.
Towers Perrin Forster & Crosby Inc., a Stamford, Conn., global consulting company, has inked a five-year lease renewal at 1925 Century Park East, where it has had offices since Watt Plaza opened in 1982.
The 43,163-square-foot renewal is valued at roughly $10 million. The lease starts at $3.65 per square foot per month on a full-service gross basis and escalates annually at 4 percent, said Kathy McKay, vice president of leasing for Watt.
The renewal, which will begin in January, keeps the company in its offices on the 14th and 15th floors, and a portion of the 13th. Towers Perrin had looked at several other Century City buildings.
“We got a very aggressive deal to stay in Watt Plaza; that incentivized us to stay,” said Lisa St. John, a Madison Partners broker who represented Towers Perrin.
Moving costs played a role in Towers Perrin’s decision. St. John said that large tenant moves even to nearby buildings are expensive, at $70 to $200 per square foot. Expenses include new furniture, stationery and information technology costs.
“In the end, what is going on with the economy played in our favor a bit,” said McKay, who represented Watt in-house. “It was difficult to justify moving costs.”
Watt Plaza is undergoing a $4 million makeover that McKay said will be complete in November. An upgrade of the property’s elevator systems should be done in mid-2010.
Towers Perrin also was represented by Peter Best of Madison Partners. Last year, Best and St. John left Jones Lang LaSalle Inc. to join Madison. They began working on the lease while at Jones Lang LaSalle. Watt also was represented in-house by Jamie Bergantz.
Burbank Deal
An entertainment industry payroll-processing company has signed an 88-month lease for 20,442 square feet of creative office and light industrial space in Burbank.
Team Acquisition Corp. of Burbank inked the $4.4 million lease with local industrial developer and landlord Rexford Industrial LLC. The deal at 901 W. Alameda Ave. starts at a market-rate $2.25 per square foot per month on a modified gross basis and escalates annually.
While the space can accommodate light industrial use, Team Acquisition will use it for creative offices and headquarters. The building, constructed in 1969, formerly housed a commercial bakery and has skylights that flood it with natural light, said Rexford managing partner Michael Frankel.
“I don’t think you can find similar space in that submarket,” said Frankel. “It looks and feels like a really modern work environment.”
Gerry Schwartz, chief executive of Team Acquisition, said that his company is growing and needed to leave its old offices near the Bob Hope Airport. The company also plans to add employees over the next year.
Since purchasing the property in September 2007, Rexford has spent more than $3 million renovating the building. The Team Acquisition deal closed March 10 and makes the building 50 percent leased.
Rexford Industrial was represented by Christopher Baer of Ramsey-Shilling Commercial Real Estate Services Inc. Team Acquisition was represented by David Kutzer and Rene Soto of Newmark Knight Frank.
Westwood Lease
UCLA has renewed its lease for 7,000 square feet of administrative offices at Westwood’s Oppenheimer Tower. The seven-year deal is valued at $2.6 million.
UCLA occupies space on floor 17 of the 24-story Class A building at 10880 Wilshire Blvd., owned by Equity Office Properties, a unit of New York private equity group Blackstone Group LP.
Equity Office owns four office buildings in Westwood. The company’s asking rents peaked in first quarter 2008 at $6.75 per square foot per month on a full-service gross basis.
But asking rents have come down dramatically and are now in the range of $2.95 to $4.95 per square foot per month, according to Hunt Barnett, a principal at Madison Partners, who handled the UCLA lease deal. Madison also handles leasing for Equity’s three other Westwood office buildings.
UCLA’s deal starts at about $4 per square foot per month and began in mid-February. Despite the recent decrease in rents, the university still had to renew at costlier terms, Barnett said.
Equity Office controls 1.7 million square feet of the 3.1 million-square-foot Westwood submarket. Barnett said that about 19 percent of Equity Office’s space is available for rent.
Chris Houge, Rick Buckley and Beau Rawi of Madison also represented the landlord; Sean O’Leary of Grubb & Ellis Co. represented the tenant.
Equity Office did not return calls seeking comment.
Staff reporter Daniel Miller can be reached at [email protected] or (323) 549-5225, ext. 263.
