Big Office Project In Glendale To Be Marketed for Sale

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Big Office Project In Glendale To Be Marketed for Sale

By CHRISTOPHER KEOUGH

Staff Reporter

Glendale City Center, a major office high-rise and adjacent vacant parcel entitled for a twin tower to be built, is being put up for sale by its owner, the State Teachers Retirement System of Ohio.

Industry watchers estimate that the existing 385,000-square-foot tower alone could sell for as much as $235 per square foot, which translates to $90.5 million.

The tower and adjacent development site encompass an entire city block in downtown Glendale, bounded by Broadway, Brand Boulevard, Wilson Avenue and Orange Street.

While officials of the pension fund declined comment, Jeanne Armstrong, Glendale’s director of development services, said the fund has notified the city that it is looking to unload its project. Meanwhile, local real estate sources said the pension fund is collecting pitches from a handful of brokerage companies.

The $235-per-square-foot estimate is based on last year’s sale of Glendale Plaza at 655 N. Central Ave., which was reported at better than $260 per foot. Because the market has cooled and Glendale City Center does not have as many tenants as Glendale Plaza, sources expect it to command a lower price.

Among Glendale City Center’s tenants is the Disney Store headquarters, which occupies 100,000 square feet on a lease that expires in 2004. Besides the possible loss of that major tenant, the building has two big blocks of sublease space available, which also tends to detract from a property’s value. ASI Entertainment is trying to sublease out a full floor, and Unum Insurance Co. is trying to find a subleasee to take over a floor and a half.

Julia Viskanta, asset manager with the Ohio pension fund’s West Coast real estate division in San Francisco, would say only that the fund is evaluating the property’s role in the fund’s investment allocation.

The teachers spent $89 million in 1997 to buy the Glendale City Center project from CB Realty Advisers. CB Realty had an equity stake in the project.

The site originally was assembled by American Trading Co. of Baltimore in the 1980s, which obtained the entitlements to build twin towers. That developer sold the undeveloped, entitled property for $12 million in 1988 to Homart Development Co., a subsidiary of Sears Roebuck & Co., which built the first tower and a parking structure. When Homart was disbanded, CB Realty inherited the project.

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