Arm of Major Investment Trust Makes Valley Purchase

Real Estate
by Danny King

It isn't exactly World Financial Center, but it'll do. The 73,000-square-foot Universal Court, the office complex that was once almost completely occupied by Walt Disney Co., has been sold for $13.5 million. The building, at 4130 Cahuenga Blvd., includes as tenants post-production company Performance Post Inc. and software company Thinque and is fully leased.

The buyer is Cahuenga Plaza LP, an affiliate of a family trust whose membership includes Frank Hauer, president of Toronto-based O & Y; Real Estate Investment Trust. O & Y; owns that city's 72-story First Canadian Place and developed New York's 6.3 million-square-foot World Financial Center.

"They sold a retirement home in Beverly Hills and this property was brought before them," said Brian Hennessey, vice president at Grubb & Ellis Co. "Since (property ownership) is Hauer's thing, he's a quick study."

The seller is an affiliate of Adler Realty Investments Inc., which sold the 160,000-square-foot Thousand Oaks Corporate Center to Countrywide Credit Industries Inc. for $29 million in July.

The Adler affilaite bought the building for about $9 million in 1999, shortly after Disney vacated the property, and spent about $2 million in upgrades while retenanting the property during the past few years.

Hennessey and Grubb & Ellis' Alexander Wadley represented the seller, while G & E;'s Marty Cohan and Joshua Levy represented the buyer.

Deal of a Lifetime?

Lifetime Entertainment was the beneficiary of a still-soft sublease market as it expanded its presence in Century Plaza Towers to 41,000 square feet from 25,000 square feet. The television network signed a 30-month, 16,000-square-foot sublease deal with Ogilvy Public Relations Worldwide, which has been downsizing at the Century City office. The sublease is valued at about $1 million.

At less than $2.10 a foot, the deal allows Lifetime short-term expansion space at a rate far less than the $3.35 average asking rate for Century City Class-A space in the second quarter.

"It's one of the few examples of entertainment expansion in recent years," said David Toomey, principal at CRESA Partners, who, with CRESA's Brian Davies, represented Lifetime on the deal. "The size, configuration and location make it ideally suited for them. It's a great deal."

In March, Lifetime renewed its 25,000 square feet at 2049 Century Park East in a three-year, $3 million deal. Lifetime has maintained offices at the south Twin Tower since 1992.

John Eichler and Anthony Gatti of Cushman & Wakefield Inc. represented Ogilvy in the deal.

Backdoor Deal

A joint venture between Kearny Real Estate Co. and financial partner Morgan Stanley Real Estate Funds recently completed a two-part deal for the leasehold interest in the 67-acre Heritage Corporate Center in Santa Fe Springs.

The partnership purchased controlling interest of the 720,000-acre business park for about $40 million. The ground beneath the park, which is 87 percent leased and includes tenants such as Kaiser Permanente and Sears, is owned by the city of Santa Fe Springs.

The deal was completed about two months after Kearny bought a $55 million non-performing loan on the park's leasehold interest at an undisclosed price. O'Donnell/Brigham had previously held the master lease and loan since it developed the property about 15 years ago.

Kearny officials did not return calls seeking comment on the financial aspects of the deals and plans for the property.

Wilshire Apartments

Legacy Partners is buying a block-long stretch of Miracle Mile property, with plans to build a four-story mixed-use project on the site. The property, which runs along the south side of Wilshire Boulevard between Ridgeley Drive and Burnside Avenue, is slightly less than two acres and consists of an Office Depot and a Sav-on, among other smaller tenants.

Plans consist of about 25,000 square feet of ground floor retail and 197 luxury apartment units.

"We're at a tender juncture with negotiations," said Dennis Cavallari, senior vice president at Foster City-based Legacy, which completed a 187-unit luxury apartment project in Westwood last year.

He declined to comment on details of the deal, but the property will trade for about $7.5 million and the development should cost another additional $35 million to $40 million, according to a source familiar with the deal.

If the deal goes through, the project will be the second major residential complex within a two-block area to get started within the next few years. One block to the west, a partnership led by L.A.-based Reliable Properties is developing a 24-story retirement and assisted living community totaling about 700,000 square feet (see related story page 27).



Staff reporter Danny King can be reached at (323) 549-5225 ext. 230, or at dking@labusinessjournal.com.

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