Burbank Tower Coming Up ShortFriday, March 14, 2014
A 32-story tower in the heart of Burbank’s media district – the tallest office building in its market – is expected to trade hands next week in a deal many consider a steal.
Worthe Real Estate Group was under contract to buy Tower Burbank, a Class A office building at 3900 W. Alameda Ave., for $109 million, according to sources familiar with the deal. That’s a considerable discount to the $167 million New York asset management firm BlackRock Inc. paid for the building in 2005.
The steep markdown comes as the 487,000-square-foot building, once more than 95 percent occupied by Burbank entertainment giant Walt Disney Co., was completely vacant but for a 5,000-square-foot Union Bank Inc. branch on the ground floor.
The purchase, expected to close March 17, will further cement Santa Monica-based Worthe’s hold over the Burbank office market, where it already owns approximately 3.8 million square feet across 14 properties, including Burbank Studios, a 982,000-square-foot media campus leased to NBC Universal for production of “Access Hollywood”; “Days of Our Lives”; and, until Jimmy Fallon brought the show to New York last month, “The Tonight Show.”
Including Tower Burbank, Worthe now controls nearly 60 percent of Burbank’s 7.3 million-square-foot office market, an advantage that could give the group a great deal of leverage in dealing with tenants seeking to be in the market.
Despite that control, Worthe will need to grapple with substantial empty space. Burbank sported a 19.8 percent vacancy rate in the fourth quarter, with an average per-foot asking rent of $3.05 a month, the highest average in the Burbank-Pasadena-Glendale submarket.
Read the rest of the story in the March 17 edition of the Business Journal.