Opus West Corp. and Infonet Services Corp. are believed to be hammering out the final details of an estimated $27 million deal for the vacant Grand Avenue Corporate Center at 2151 E. Grand Ave. in El Segundo.
The deal would be a positive sign in a submarket that has been heading south in recent months. Third quarter numbers showed negative absorption of 362,417 square feet and an office vacancy rate of 16.3 percent.
Through a spokesman, Opus West officials said there was no deal for the 121,000-square-foot office building that was delivered to the market this fall, but is 100 percent vacant. The spokesman said the Phoenix-based developer was shopping the building to several potential buyers. Dick O'Reilly, Infonet's senior director of administrative services, denied the sale was under contract.
Several real estate sources familiar with the deal, however, said it was in the final stages of due diligence.
Fully leased, Class-A buildings in the market have sold for between $260 and $280 per foot. Because it is empty, the Grand Avenue Corporate Center would be worth about $225 per foot, according to one broker. The building cost a reported $25 million to build.
Infonet owns the 165,000-square-foot property across the street at 2160 E. Grand Avenue. That project was a build-to-suit by J.P. Morgan Chase & Co. Infonet initially leased it with an option to buy and exercised the option upon moving in.
Sources said they believed Infonet would occupy as much as a third of the available rentable space in its new building and lease the remaining space until the company grew into it.Santa Monica Sublease
Two companies have taken advantage of a Westside office market riddled with sublease space and received 50 percent discounts on space at J.P. Morgan's Water Garden II office project.
Frontera Corp., the former Idealab company that provides customized online content and commerce, sublet 13,000 square feet from Sapient Corp., which earlier this year ditched 60,000 square feet of its 85,000-square-foot lease in the building. Frontera is paying Sapient $1.95 a foot per month for space Sapient was renting at $3.80, according to Rick Buckley, senior managing director at Insignia/ESG Inc., who represented Sapient in the deal.
The short-term deal is good for 18 months, according to Matthew Miller, principal at CRESA Partners LLC, who represented Frontera in the negotiation.
Miller said Frontera is moving from Arden Realty Inc.'s Howard Hughes Center in West L.A., where it was paying $3 per foot.
Also signing up for Sapient space was software design company Accruent Inc., formerly Westmark Harris Advisors Inc. Accruent took 16,000 square feet, also on the fifth floor. The company will pay $1.90 per foot with annual increases of 3 percent over the five-year term of the lease, according to Buckley.
Sapient still has another floor with 28,500 square feet to sublease, Buckley said.
Also coming on line for sublease are 50,000 square feet at the Arboretum Courtyard at 2150 Colorado Ave. in Santa Monica, previously occupied by IBM Corp.'s e-Business Innovation Center.
The e-Business Innovation Center, which had 125 people in January, decided to disperse employees throughout IBM's other offices in Glendale, Gardena, Costa Mesa and West Hills, said Dan Morrison, spokesman for IBM Global Services, under which the e-Business Innovation Center operates. Other IBM employees working at the building, but not in the e-Business Innovation Center were moved, as well.
IBM took nearly the entire 53,000-square-foot building at 2150 Colorado Ave., said Dave Toomey, principal at CRESA Partners. The building next door, at 2120 Colorado Ave., already has 73,000 square feet of about 81,000 square feet available for sublease. Part of it is leased by eCompanies and Business.com, while the other part is being leased directly by Equity Office Properties Trust, owner of the two buildings.Davis Re-Ups for Big Bucks
Billionaire Marvin Davis is likely to pay close to $6 per foot to renew his lease for 50,000 square feet at Fox Plaza.
Century City real estate sources said Davis re-upped at $5-$5.85 per foot with 4 percent annual increases for five years. Davis apparently will get $26 per foot for tenant improvements on his space and has the option to cancel the lease at the end of the fourth year by paying a $350,000 penalty.
A spokesman for Davis would only confirm that the lease had been renewed.Sensible Leases
Patriot Communications LLC, a West Hollywood telecommunications company launched by Western International Media founder Dennis Holt, signed a five-year, $2 million lease for 50,000 square feet at 10441 Jefferson Blvd. in West L.A. The company will move next month from its 8,000-square-foot offices on Sunset Boulevard. Blake Mirkin, senior vice president with CB Richard Ellis Inc., represented Patriot Communications in the deal. Jeff Pion, also a senior v.p. with CB, represented the landlord, Steaven Jones Development Co .
Berkshire Mortgage Finance Co. signed a five-year, $1.7 million lease for 5,200 square feet at 233 Wilshire Blvd. in Santa Monica. Berkshire is merging with Anacapa Capital Inc., and the resulting firm will consolidate operations at the site. Mirkin represented Berkshire. David Hitzell of Equity Office Properties represented the landlord in-house.Industrial Leases
Camfil Farr Inc. signed a seven-year, $1 million lease for an 18,068-square-foot warehouse/industrial building at the Dominguez Technology Center in Carson. Camfil Farr, which designs and manufactures air and liquid filtration equipment, will relocate to 2121 Paulhan St. from El Segundo in January. Courtney Bell, Doug Marshall and Harvey Beeson of the Klabin Co. represented Camfil Farr in the negotiation. Bret Quinlan and Michael Sidney of Cushman & Wakefield represented the landlord, Carson Dominguez Properties LP
Nippon Antenna Co. Ltd. signed a five-year, $600,000 lease for 11,939 square feet at Dominguez Technology Center in Carson. Nippon Antenna, which manufactures and distributes antennae for such applications as satellites, will relocate to 18300 S. Wilmington Ave. from Torrance.
Staff reporter Christopher Keough can be reached at (323) 549-5225 ext. 235 or by e-mail at email@example.com.
For reprint and licensing requests for this article, CLICK HERE.
Stories You May Also Be Interested In
- Real Estate Column---Warehouse Deals Highlight Surge in Industrial Activity
- Chinese E-Vendor Picks Pasadena for Pictures Push
- INTERNET---Dot-Com Sublet Space Floods Westside Market
- RE Column
- OFFICES---Creative Office Fad Fades
- Real Estate Column---With New Developments, Telecom Space Could Double