The axiom that business with the federal government is a safe haven during recessions is ringing true this go-around. The U.S. General Services Administration has been busy in the local real estate market, with two noteworthy leases this summer.
In early July, the GSA inked a $14.4 million lease renewal and expansion for the Executive Office for Immigration Review at 606 S. Olive St. The six-year lease includes a 13,000-square-foot expansion, giving the agency 72,210 square feet at the downtown L.A. property, owned by landlord 606 Olive LLC, the entity of an L.A. family that invests in real estate.
The Executive Office for Immigration Review is an agency within the Department of Justice that oversees immigration courts. The space includes several courtrooms and ancillary offices, including deposition rooms and judges’ quarters.
According to GSA spokeswoman Gene Gibson, it made sense for the agency to remain at the 24-story City National Bank Building, where is has been a longtime tenant, because the building could offer 32 reserved parking spaces for the court’s judges. While the number of parking spaces may sound modest, it’s a significant number in parking-challenged downtown.
“606 S. Olive was the only building that could provide the 60,000 usable square feet and the parking,” Gibson said in an e-mail interview.
The agency’s new space is under construction and will include additional courtrooms, said Charles Dunn Co. broker John Anthony. The agency is spending about $50 per square foot on the construction of the space, which will be ready for occupancy by October.
The agency is also the biggest tenant at the building, which is now 95 percent leased and houses other federal agencies.
The lease, which will begin Oct. 15, starts at $2.58 per square foot per month on a full-service gross basis and escalates annually.
Westwood Deal
The GSA also inked a five-year renewal for the Military Entertainment Public Relations agency at 10880 Wilshire Blvd. in Westwood. The $4.6 million deal, which closed in late June, is retroactive to July 2008 because it took about a year to complete the lease agreement.
The office houses representatives of each branch of the military, which interact with the entertainment industry on various issues, such as using military bases for filming.
Broker Hunt Barnett of Madison Partners, who represented landlord Equity Office Properties, said the deal took so long to complete because all five branches of the military had to be consulted.
The 14,187-square-foot deal with Equity Office, a unit of New York-based private equity firm Blackstone Group LP, is reflective of mid-2008 pricing, Barnett said.
While the starting rate was not disclosed, given the total consideration, it is likely that the lease begins at a rate higher than the building’s current asking price range of $2.95 to $3.85 per square foot, full-service gross.
Rick Buckley, Chris Houge, Beau Rawi and Karly Nolen of Madison also represented the landlord. Tim Pavek of Carpenter/Robbins Commercial Real Estate Inc. represented the GSA.
Equity Office could not be reached for comment.
Burbank Media Lease
Preferred Media, a media storage company that caters to the entertainment industry, has signed a 10-year lease at 2777 N. Ontario St. The July 10 deal for 46,943 square feet with landlord Second Street Ventures, a Santa Monica real estate developer, is valued at about $5.3 million.
Preferred Media, which is relocating from 2815 Winona Ave. in Burbank, decided to move to the building because the company has other facilities across the street, according to its broker, Steve Scott, a senior vice president at Lee & Associates Commercial Real Estate Services.
Broker Nico Vilgiate of CB Richard Ellis Group Inc., who represented the landlord, said that the two-story office and industrial building has other entertainment industry tenants, including postproduction company Point 360, making Preferred Media a good fit. With the deal, the property is now 98 percent leased.
Preferred Media is renovating the space. Scott said the company would take occupancy by January. The lease starts at 75 cents per square foot per month on a triple net basis and escalates annually, which Vilgiate called “market rate.”
Preferred Media has offices in Chicago; New York; London; and Sydney, Australia. It did not return calls seeking comment.
David Harding of CB Richard Ellis also represented the landlord.
Staff reporter Daniel Miller can be reached at [email protected] or (323) 549-5225, ext. 263.
