By ELIZABETH HAYES
Staff Reporter
With values on the rise in Hollywood, investors continue to flock there and not just to develop new retail-entertainment venues.
Bastion Development, a privately held company headquartered in Vancouver, British Columbia, is in escrow to buy the famed Frederick’s of Hollywood building for its listed price of $4.5 million.
“The area’s coming up and Frederick’s is an extremely well-known building. So it’s a good landmark and location and has the potential for an increase in value,” said Duncan Lemmon, principal with Lee & Associates Commercial Real Estate Services, who represents Bastion and has brokered $100 million worth of Hollywood deals in recent months.
Frederick’s plans to remain as a retail tenant, but is looking to eventually relocate its headquarters and distribution facility to a more practical location, said John Tronson, a principal at brokerage Ramsey-Shilling Co., who is representing Frederick’s in the sale, along with Michael Malick.
Located at 6608 Hollywood Blvd., the property encompasses about 66,000 square feet of space, including retail and office space, a penthouse and a freestanding warehouse. The 62-year-old building with its distinctive pink awnings is listed on the National Register of Historic Places.
Tronson said TrizecHahn Corp.’s major retail-entertainment project and others that are on the way have spurred what had been a sleepy office market. He sees the possibility for office rents doubling in the next five years. Currently, they stand at about $1.50 a foot per month, still a far cry from parts of the Westside, where rents range from $2.50 to $3.
Musical chairs
The recent spate of brokers jumping to new jobs continued last week, as a top producer at Grubb & Ellis Co., Rosey Miller, went to Julien J. Studley Inc. and two of Westmac Commercial Brokerage’s top producers opened their own firm.
Miller, who had been with Grubb for 12 years, will be a senior managing director with Studley, focusing on tenant representation. He said he will continue to specialize in entertainment, technology, securities, accounting and law firm tenants.
He said he was attracted to Studley because of the focus on tenant rep work, the “depth of talent” and ability to work with specialists in such areas as law and financial firms. Howard Sadowsky, who has been promoted to senior regional manager for Studley, said he and Miller have known each other for a number of years.
Also joining the firm will be Gregory Gerber from Studley’s Chicago office. He will run the downtown Los Angeles office, which had been headed by Steve Bay before Bay joined Insignia/ESG. Gerber’s title will be regional manager.
Meanwhile, David Thurman and Gregory Sackler, who had been with Westmac almost since its founding about 10 years ago, opened Concorde Real Estate Partners in Santa Monica.
Thurman said the split was amicable, but the two wanted to take advantage of a strong market and concentrate more on investment sales. The two have developed expertise in handling property investments in the $1 million to $10 million range.
Deal unravels
Koll Development Co.’s planned purchase of a 12-acre Culver City site has fallen out of escrow due to problems with the structure of the deal and lack of agreement on entitlements, said Gary Toeller, a senior vice president at Koll.
“We would like to purchase the property and continue discussions. I think they’re going back to the market,” Toeller said. “We’re disappointed it didn’t go forward.”
Koll was buying the property from Bank of Montreal, which had taken back the property from Bramalea Inc. through foreclosure.
Koll had planned to develop a $150 million speculative office complex on the site, encompassing 750,000 square feet of space in a tower and low-rise campus. The site sits on a bluff near the Fox Hills Mall.
Galleria action
Warner Bros. Television’s animation group is considering moving to new office space that will be created at the Sherman Oaks Galleria, said Mee Lee, a vice president at Douglas Emmett & Co., which owns the building.
Warner, which currently leases close to 100,000 square feet in the adjacent office tower on Sepulveda Boulevard, wants to expand a bit, she said. Sources have said Warner is eyeing the Robinsons-May department store space, but Lee would not confirm that.
“Now, they’re spread out in five or six floors. Their operation works better when they’re closer together in larger floorplates,” Lee said.
First tenant deal
Glendale Plaza, the 25-story class-A office tower going up on North Central Avenue and the 134 freeway, snagged its first tenant last week.
State Compensation Insurance Fund signed a long-term lease for 125,000 square feet, said John Barganski of PacTen Partners. The lease is valued in excess of $35 million, according to industry sources.
The lease will allow State Comp, the state’s leading workers’ compensation insurance provider, to consolidate its existing office facilities from the San Fernando and San Gabriel valleys and elsewhere. State Comp is expected to occupy its new offices next year. The 529,000-square-foot building is one of the largest speculative high-rises under construction in the L.A. region.
News & notes
Goldman Sachs & Co. has been retained to sell 10 Universal City Plaza, also known as the Texaco Building, real estate sources said. For several months, Seagram Co. has been exploring the sale of the 740,000-square-foot building in Universal City, which could reportedly fetch about $200 million. Majestic Realty Co., the largest Los Angeles County-based developer, is under contract to buy the so-called cornfield site, which encompasses about 35 acres adjacent to Chinatown, just down the hill from Dodger Stadium, according to real estate sources. Majestic is eyeing the vacant, banana-shaped parcel for potential industrial development.
Elizabeth Hayes can be reached at (323) 549-5225 ext. 229.
