Real Estate Column

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Is the Miracle Mile feeling the effects of high rents and low vacancies on the Westside?

Looks like it. The direct vacancy rate dropped to 14 percent for the Miracle Mile in the third quarter, according to Cushman & Wakefield. That’s down from 17.6 percent in the second quarter.

Rents for class-A Miracle Mile properties have risen to the $2.40 to $2.50 per square foot range, according to brokers, but that’s still a bargain compared to a lot of Century City and Santa Monica.

“(The Miracle Mile) was a market where some tenants used to turn their noses up, and today, it’s the first alternative of choice if people can’t find space in Santa Monica or Century City,” said Christopher Cooper of Jones Lang LaSalle.

One office building that has had fared particularly well of late is 6500 Wilshire Blvd., a 23-story, class-A tower at San Vicente Boulevard. The building is 95 percent occupied, said Scott Murphy of Prentiss Properties Ltd.

Dreyfus Brokerage Services recently signed a seven-year lease for 40,000 square feet at the building, in a consolidation of two other L.A. offices. The lease is valued at about $8 million.

Dreyfus will be moving to the eighth and ninth floors from two directions Beverly Hills, where it has a trading floor, and Museum Square to the east, where the firm has offices.

“Their lease was coming up and they wanted to move west, but they were cost conscious and Century City was expensive. The solution was a means of consolidating the entire brokerage services of the West Coast into one facility,” said Cooper, who represented the firm.

He noted that the move positions Dreyfus on the L.A.-Beverly Hills border, but without the higher lease rates.

“Beverly Hills is still horribly expensive, so people are looking for relief from rents,” Cooper said.

Dreyfus also wanted to move to a newer building with newer systems, such as supplemental generators, because it cannot afford to have its trading floor go down in a power outage, Cooper said.

Murphy represented the landlord, WRC Properties, a subsidiary of Teachers Insurance and Annuity Association.

The deal follows on the heels of two large lease deals with E! Entertainment and Western Initiative Media Worldwide at Wilshire Courtyard, 5700 and 5750 Wilshire Blvd. That class-A Miracle Mile project is now 96 percent leased, up from 50 percent a year ago.

Law firm moves

The L.A. office of Perkins Coie LLP moved recently to the Water Garden in Santa Monica from Century City.

“1999 (Avenue of the Stars, the firm’s former location) is a superb building. We had space, though, that wasn’t well configured. We ran out of partner offices and reconfiguring wasn’t cost effective,” said Bruce Sherman, managing partner of the Seattle-based firm’s L.A. office.

The 25,000-square-foot Water Garden space at 1620 26th St. has additional partner and associate offices, an expanded, state-of-the-art conference center and communications systems.

The move also was prompted by the firm’s growth and desire to be near clients, many of which are tech-related.

“We want to use technology to render services more efficiently. That was a significant draw,” Sherman said.

Stuart Taylor and Todd Anderson of Cushman Realty Corp. represented Perkins Coie. Lisa St. John of Trammell Crow Co. represented the landlord.

Marina del Rey sale

Citicorp has sold a 180,000-square-foot office building on 10 acres in Marina del Rey to William O’Neil & Co., the main tenant in the building, for a little over $20 million.

The building is in the Marina Business Park, at 12655 Beatrice, across from Playa Vista. O’Neil, which publishes Investors Business Daily, occupies about three quarters of the building for offices and warehouse space.

John Bertram and Tim Macker of Westmac Commercial Brokerage Co. represented the buyer.

Valley apartment deal

Pacific Property Co. has acquired the 348-unit Vineyard Apartments in Chatsworth for about $23 million from San Diego-based Fairfield Inc.

The purchase is the first in Southern California for the Palo Alto-based multifamily investment company, which plans to make an additional $80 million in acquisitions this year. Built in 1972, the Vineyard is a three-story, campus-style project.

Baron Jones, Bill Dubrowa, Davis Casper and Bruce Furniss of Grubb & Ellis were the brokers for the transaction. Phillip Shuster, Pacific’s Southern California regional director, also led the acquisition. Jones said there were about 15 offers from qualified buyers.

“We thought it was going to go for less,” he said. “In a bidding situation, the sky’s the limit.”

News & notes

Two big leasing assignments were announced last week. Insignia/ESG was appointed as exclusive leasing agent for Citibank Center, at 444 S. Flower St. downtown. Heading the leasing team for the 48-story building are John Ollen, R. Todd Doney and Nico Vilgiate. And DLJ Realty Services Inc. was retained to market and lease Fox Plaza in Century City. The firm’s newly established West Coast regional office, composed of J.D. Cook, Jeffrey Strnad and Gary Weiss, will handle the assignment for the 34-story tower

Employee Retirement Plan of Consolidated Electrical Distributors Inc., through Irvine-based Dolphin Partners, purchased a Tarzana office building for $8.2 million. The 72,000-square-foot building, at 18757 Burbank Blvd., is more than 80 percent leased. Dean Heck and Robert Gray of Beitler Commercial Realty Services represented the seller, Burbank Boulevard LLC. Cheryl and Corbett Richmond of Capital Commercial/NAI represented the buyer, a pension fund based in the Midwest

Lowe Enterprises Investment Management, on behalf of a pension fund client, bought the 142,000-square-foot Tri-Center Plaza in Van Nuys from Cornerstone Properties Inc. for $21.7 million.

Elizabeth Hayes can be reached at (323) 549-5225, ext. 229, or at [email protected].

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