Another void left by the decline of the aerospace industry is a big step closer to being filled.
The Burbank City Council recently gave its final approval to a project proposed by Zelman Development Co., which is expected to soon close escrow on a 103-acre site in Burbank owned by Lockheed Martin Corp. The property is bordered by Buena Vista Street, Empire Avenue, Victory Place and Victory Boulevard.
Zelman plans to break ground on a massive retail and office complex called the Burbank Empire Center by early November.
No comparable development site in size or location exists in Burbank, where office space is in high demand.
As planned, the retail component will total 750,000 square feet and include major tenants like Target and Costco, each taking up about 150,000 square feet. Lowe’s Home Improvement will occupy another 135,000 square feet.
The retail project will also feature three restaurants: Home Town Buffet, Roadhouse Grill, and TGI Friday’s. Other tenants will include a Sears Great Indoors store.
The office space will be housed in four or five low-rise buildings in a campus setting, with roughly 500,000 square feet at final buildout, said Paul Stockwell, corporate managing director for Julien J. Studley Inc.
The pace of leasing activity will determine how quickly the office buildings go up.
Bill Boyd, a broker with Grubb & Ellis Co. who operates in the Burbank, Glendale and Pasadena areas, said the market should quickly gobble up the space.
“Every project in Burbank and in the Tri-Cities market has started construction without any pre-leasing,” Boyd said. “The need for office space in Burbank has been critical for years. Vacancy continues to remain under 5 percent for existing office space.”
The site was previously used by Lockheed to build commercial and military aircraft from the 1920s until it shuttered its operations in 1991, setting the stage for years of environmental cleanup and lengthy reviews.
Bullish on Burbank
Robert Flaxman of Crown Realty & Development said the strong Burbank commercial real estate market has his firm looking to make more buys there.
Since 1998, the company has bought up seven parcels on San Fernando Road totaling 30 acres near downtown. About a third of that has been developed, including the conversion of an industrial building for the West Coast headquarters of Black Entertainment Television, as well as a shopping center anchored by a Ralphs supermarket.
“We’re going to continue to buy property as it becomes available on South San Fernando Road,” Flaxman said. “We believe long-term in the Burbank market.”
Crown Realty’s plan to convert a 400,000-square-foot industrial space on San Fernando Road into 600,000 square feet of office space hinges at the moment on the outcome of negotiations between Crown and an existing tenant to terminate a major lease, Flaxman said.
“There are some really neat buildings there that we think could be creatively re-used, much in the style of building reuse that has occurred on the Westside,” he said.
Crown recently bought the 21-acre Wateridge Park office complex in Culver City.
Progress in Pasadena
Koll Development Co.’s 176,000-square-foot Koll Center Pasadena is 48 percent pre-leased and set to open next March, company officials said.
Negotiations are ongoing with several other prospective tenants for the building at 1055 E. Colorado Blvd.
Meanwhile, Paracel Inc., a company that develops technology for use in the decoding of human genomes, signed a 10-year lease for 85,000 square feet in a deal valued at more than $25 million, said Kevin Duffy of CB Richard Ellis.
Duffy represented Koll Center Pasadena, and Roy Longman at Cresa Partners represented Paracel.
Repositioning the ‘Whale’
The new owners of the Pacific Design Center say they have leased 75,000 square feet of additional showrooms since buying the facility 11 month ago.
But the real test in filling up the 1.4 million square feet of space will come as New York City-based co-owner Charles S. Cohen works to reposition the Center Green building as creative office space. He hopes to repeat the success he has had in repositioning the Decoration & Design Building in Manhattan.
Cohen has recruited CB Richard Ellis for the leasing job.
“We’ve been doing some negotiations; we are showing the space on a consistent basis,” Cohen said. “There is a lot of interest in it.”
The building is owned by Cohen and Cheslock Bakker & Associates, who bought the troubled Pacific Design Center in October 1999. They are spending close to $40 million to break up showroom space in Center Green into glass-partitioned office spaces, while adding elevators and redesigning the building’s lobby.
The building will still have trade-only interior design showrooms on the first, second and sixth floors that extend from the blue building next door. The remaining six stories are being converted into 212,000 square feet of Class-A creative office space marketed to the entertainment industry and technology sector.
Lockheed Redux
A former Lockheed Martin site in Santa Clarita will be the new home of medical device manufacturer Advanced Bionics Inc., which is moving its headquarters from Sylmar.
Advanced Bionics is buying 25 acres at Legacy Partners Commercial Inc.’s 200-acre North Campus at Rye Canyon Business Park, a 19-building, 425,000-square-foot office and industrial complex.
Advanced Bionics was started by MiniMed Inc. founder Alfred Mann. The firm plans to build a new $75 million, 500,000-square-foot headquarters, with the expectation that its workforce, currently 300 strong, will triple in size in the next five years.
The company also signed a six-year, $5.5 million lease for 122,500 square feet of office and research space at the North Campus portion of the former Lockheed site. Construction is underway on three buildings totaling 216,000 square feet on the South Campus.
Jim Linn of Grubb & Ellis Co. represented Advanced Bionics, and Doug Sonderegger and Craig Peters of CB Richard Ellis represented Legacy Partners.
Staff reporter Milo Peinemann can be reached at [email protected].
