The Gap Building on Westwood Boulevard will soon have a major new tenant: UCLA Extension.
The university signed a 10-year lease for almost 48,000 square feet in the building at Westwood Boulevard and Weyburn Avenue. It will primarily be used for classrooms and will replace space that UCLA has been leasing on the Third Street Promenade in Santa Monica, where rents have shot up.
"Plus there's the fact that they have outgrown it and need a more modern facility," said Joel Mayer, senior vice president of Madison Marquette Retail Services.
Madison Marquette, which co-owns the building in partnership with DLJ Real Estate Capital Partners and Christina Development, is handling the leasing.
Mayer said the extension classes will draw a constant flow of customers for merchants in Westwood Village. Those students are expected to generate more sales than office tenants, who use a narrow range of services.
"It's not only a lot of space, (but) it's really terrific potential customers," Mayer said. "Extension has become very big and popular."
UCLA has leased the second, third and fourth floors as well as the basement of the building, while the Gap will remain on the first floor. Renovations are ongoing and UCLA expects to move in during the fourth quarter.
David Gordon and Craig Jablin of Julien J. Studley represented UCLA, and Madison represented the ownership.
In addition to their ownership stake in the Gap Building, DLJ and Larry Taylor's Christina Development purchased 180,000 square feet of mainly one-story, street-front retail buildings in Westwood Village in 1997. Taylor's idea was to upgrade the shops and lease them to high-caliber retailers such as Tiffany's and Armani.
But Taylor apparently wasn't moving fast enough for DLJ, so Madison Marquette came on board early last year to help with a leasing and development plan.
The UCLA deal is the first major lease to be signed since then. But Mayer said 85 percent of the space is now committed or leased, and the balance is in negotiations. Koo Koo Roo has signed a deal, and another restaurant and Urban Outfitters are negotiating leases.
The plan is to attract a wide variety of merchants to serve the local community, including residents and students. "We're not doing a narrow approach or saying it has to be Beverly Hills," Mayer said.
Madison is also redoing the former Macy's building in the Village with a host of new tenants to replace the department store that moved out more than a year ago. Madison recently acquired the building on a ground lease from Federated Department Stores. Expo Design Center is negotiating to lease the entire 100,000-square-foot ground floor.
Madison is also negotiating with upscale grocers, soft goods and home furnishings retailers.
"With the Macy's development and the activity generated there, it's going to make a major statement," Mayer said. "It will provide a major anchor."
Westwood can surely use the activity. Its long-promised comeback has yet to materialize, as other new retail projects proposed for the area have gone into holding patterns.
"The development of urban areas occurs where the roots are planted," Mayer said. "Third Street Promenade took 10 years. Pasadena was the same thing. Areas become outstanding after a lot of work is done to bring them to that point."
Westwood Center Leases Up
Westwood Center, formerly the Monty's Building, has turned out to be quite a success story for Arden Realty Inc.
Liberty Digital LLC has taken the last block of space in the 300,000-square-foot building at 1100 Glendon Ave. The interactive television company, which was formed by Liberty Media Corp., is leasing 11,500 square feet on the 20th floor of the newly renovated building. Liberty signed a 10-year deal valued in excess of $5 million.
Lee Masters, former head of E! Entertainment, is heading Liberty Digital.
Douglas Econn and Jerry Porter of Cresa Partners represented Liberty Digital, and Eric Hasserjian represented landlord Arden Realty in-house.
Hasserjian said the building is 95 percent leased, and Arden is negotiating to bring a restaurant into space on the ground floor.
UCLA had been negotiating for the building last summer, but that deal fell through. All the better for Arden, because rents have risen since then. Space in the building was initially going for a monthly rate of $2.75 to $3.25 a square foot, but now the asking rate has shot up to $4.
The tenant roster includes PeopleSupport.com, LRN Inc., Thirsty.com, Lehman Brothers, Madison Marquette, Grubb & Ellis Co. and Knowledge Universe.
CB Richard Ellis has finalized its lease deal downtown, in MaguirePartners' Wells Fargo Center at 355 Grand Ave.
About 160 employees who now work at Beaudry Center and at 865 S. Figueroa St. will consolidate in the building, while CB's corporate headquarters remains in El Segundo. The downtown offices will contain corporate communications, legal, appraisal and brokerage services.
CB sold its former headquarters on Fremont Street for $8 million last fall to the Carpenters Pension Trust for Southern California.
Whitley Collins of CB represented the company in the lease, while Tony Morales represented MaguirePartners in-house.
In other downtown news, yet another telecom lease has been signed. Nextlink Communications Inc. inked a 15-year deal for 68,000 square feet of telecom switch space at 600 W. Seventh St.
Nextlink will occupy the entire third floor and receive prominent, building-top signage.
John Anthony of Charles Dunn Co. represented the tenant in the $25 million lease. Kevin Keating of TRES represented the landlord.
BN Properties LLC, a Malibu-based investment and development firm, has purchased a 160-unit apartment complex in L.A. for $12.7 million.
Colonial Gardens Apartments is located at 11730-11810 National Blvd. and 3025-3121 S. Barrington Ave. It was fully leased at the time of the sale by L.A.-based National Barrington Properties.
Martin B. Cohan of Grubb & Ellis represented the seller, and Errol Spiro of Miller & Desatnik and Brian Horner of Venture West Funding represented the buyer.
Elizabeth Hayes can be reached at (323) 549-5225, ext. 229, or at firstname.lastname@example.org.
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