With its Howard Hughes Center pulling in tenants at strong Westside rents, Arden Realty Inc. is picking up the pace of new construction to meet the demand.
And while builders pick up the pace, directors are probably dancing around the boardroom.
The real estate investment trust's Howard Hughes Center, its first major foray into new development, has been on a roll since signing a deal last year for a 160,000-square-foot, build-to-suit for Univision Television Group.
Pre-leasing rates in the newest building at 6080 Center Drive are going for an average $3.40 per square foot per month. The 12-story building is 80 percent pre-leased and set to open in the spring, according to Arden.
Leasing has been so strong that Arden decided to break ground this month on a 286,000-square-foot building at 6100 Center Drive, nearly 18 months ahead of a timeline put in place two years ago. It also plans to break ground next month on a 160,000-square-foot spec building at 6040 Center Drive.
Company officials say leasing momentum is strong and note that J.H. Snyder Co.'s 250,000-square-foot retail component of the project is set to open early next year. Most tenants are of the Old Economy variety and were attracted by the project's proximity to housing in the South Bay.
Strong leasing activity has also pushed up rents at the older 6701 Center Drive West (the Blue Shield building), where new leases are being signed at $3 a square foot, per month up from $2 three years ago.
"We have made Howard Hughes Center part of the lower Westside," said Robert Peddicord, Arden's senior vice president of leasing.
Indeed, a number of tenants are headed to the project from the Westside. Cooking.com signed up for 25,000 square feet and is moving from Santa Monica Business Park, while Benefit Planning Inc. is moving from Marina Towers on Admiralty Way into a 14,000-square-foot space.
In addition, law firm Haight, Brown & Bonesteel LLP will move from its 85,000-square-foot space at Water Garden I in Santa Monica into 61,000 square feet in a 10-year deal valued at about $25 million.
The fully leased 6060 Center Drive building's tenants include intellectual property law firm Fulwider, Patton, Lee & Utecht LLC, a former tenant at Westwood's Center West at 10877 Wilshire Blvd., and iXL, an Internet services company out of Westwood.
In fact, the office market has been so tight on the Westside that Turner Broadcasting Systems' planned move next August from 1888 Century Park East into Water Garden I in Santa Monica comes after brokers negotiated a complex deal to get law firm Haight Brown out of its lease to make room for TBS.
Under the deal, TBS is taking 85,000 square feet and will also have the option of expanding into 25,000 square feet now being subleased by Vanetten, Suzumoto & Haag LLP, said Lisa St. John of Trammell Crow Co.
St. John represented Water Garden I owner J.P. Morgan Investment Management Inc. in the deal.
"Haight Brown wanted to downsize and Turner needed to expand," St. John said. "It was one of those deals where everything lined up."
Arden Realty was represented in-house in all the deals by Michael Pollack, director of leasing for Howard Hughes Center, and by CB Richard Ellis' Grafton Tanquary, John Ayoob, Stanley Gerlach and Bill Bloodgood.
TBS was represented by Craig Jablin of Julien J. Studley Inc. and Steve Walbridge of Cresa Partners.
Haight Brown was represented by Steve Walbridge of Cresa Partners and Arlene Sommer of Julien J. Studley Inc. Cooking.com was represented by Matthew Miller of Cresa Partners, and Benefit Planning Inc was represented by Century Commercial Brokerage.
In the LAX corridor, which is arguably the last office leasing boat to rise outside of downtown L.A., the largest two deals of the year closed recently at the Airport Center I, II and III.
Car rental giant Hertz Corp. signed a 20,000-square-foot lease valued at just more than $3.5 million at 6151 W. Century Blvd. Meanwhile, at 5959 W. Century Blvd., software company Interactive Search, which makes career-oriented software for Web sites such as careerpath.com, signed a 34,000-square-foot lease valued at more than $2 million.
Owner JRC Properties Inc., a joint venture of GE Capital Corp. and Chicago-based Jupiter Realty Inc., was represented by Chris Strickfaden, Jim Bowers and Lyseanne Nardizzi of PM Realty Group.
Forest Blake of Cresa Partners represented Hertz. John Ghiselli, Janice Cimbalos and Jonathon Wechsler of Studley represented Interactive Search.
A lot of interest along Century Boulevard has come from space-hungry dot-coms that are anxious to relocate because of pressure from venture capitalists to keep costs low, Bowers said. "Other areas do not have this large space available, and we have the rates," Bowers said. "Even more so, we have the flexibility of doing short- or long-term deals."
It's no mystery why Sheldon McArthur decided to move his Mystery Bookstore from Beverly Boulevard to Westwood Village.
Instead of going from $2.50 to $4 a square foot to remain at his location on Beverly east of Robertson Boulevard, McArthur instead signed a 10-year lease for $2.25 per square foot on Broxton in Westwood Village.
McArthur is moving into retail space that's part of the city-owned Broxton parking structure at 1036 Broxton Ave., which the city built for $9 million. But since it opened in November 1997 its retail component facing Broxton has not been fully leased.
The bookstore is the first in Westwood Village in years. The other tenants in the Broxton parking structure are Art One Gallery its other branch was a pioneering retailer in the early days of Third Street Promenade and the Westwood Village Community Alliance Policing Center.
"It means the chance to expand and grow, and I think Westwood has begun to make a major comeback," McArthur said. "It has nothing but great potential."
Staff reporter Milo Peinemann can be reached at firstname.lastname@example.org
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