MGM's Law Firm Looks to Join Studio at High-Rise

Real Estate
by Danny King

A phone call could be replaced by an elevator ride for Metro-Goldwyn-Mayer Inc.'s legal representation.

Law firm Christensen Miller Fink Jacobs Glaser Weil & Shapiro LLP is close to signing a 15-year lease for 65,000 square feet at MGM-anchored Constellation Place in Century City, according to real estate sources.

The firm, Los Angeles' 13th largest, would move next year from its 65,000-square-foot offices in nearby Fox Plaza, where it has maintained its headquarters since its inception in 1988.

Financial terms have not been disclosed, but sources value the deal at more than $50 million, with an estimated starting rate at less than $4 a foot.

"We're very close to making a decision," said Blake Mirkin, first vice president at CB Richard Ellis, who, with Gary Weiss, now senior vice president at J.H. Snyder Co., is representing Christensen Miller in its search. Mirkin, who noted that the firm has also looked at Century Plaza Towers and 1901 Ave. of the Stars as a potential home, would not comment specifically on a Constellation deal.

Mark McCaslin, principal at McCaslin Co. and leasing agent for Constellation Place, did not return calls.

Christensen Miller's relationship with MGM goes back to 1969, when partner Terry Christensen helped represent MGM majority owner Kirk Kerkorian during his first purchase of the entertainment company.

The deal would be the first lease signed at Constellation Place since International Lease Finance Corp. inked a deal for 128,000 square feet in early 2001. And with a starting rate of less than $4 per foot, the lease, it's cheaper than the two other deals signed at the 710,000-square-foot project. MGM, which signed a 342,000-square-foot lease in late 2000, and ILFC, will be paying more than $4.50 a foot, say sources.

With the Christensen Miller deal, the JMB Realty Corp.-developed project will be 75 percent filled seven months before completion. That's no mean feat in a Century City market with a vacancy rate at 11 percent, up from 4 percent in the fourth quarter 2000 when MGM signed its deal.

Back to School Sale

Retirement fund Teachers Insurance and Annuity Association - College Retirement Equities Fund is buying Westwood Marketplace, the 212,000-square-foot retail center that was formerly the Bullocks/Macy's site, from Cincinnati-based Madison Marquette.

Terms have not been disclosed, but the sale price for the fully-leased center, which Madison Marquette redeveloped and reopened last fall, is close to $75 million, according to sources.

Officials from TIAA-CREF, which owns $3.5 billion in real estate assets nationwide, did not return calls. Officials of Madison Marquette and Eastdil Realty, which is listing the property, would not comment.

At nearly $75 million, the center would be selling for about $350 a foot. By comparison, Trizec Properties Inc.'s Paseo Colorado is close to a deal valued at $278 a foot. The Glendale Galleria, owned by a partnership of Cigna Corp., Donahue Schriber and the New York State Teachers' Retirement Fund, is on the market and could sell for $333 a foot.

At that price, Westwood Marketplace would also be selling at a capitalization rate (essentially the rate of return) in the low-7 percent range.

"The low cap rate reflects the belief in the intrinsic quality of the signatures and the difficulty in placing money today," said Matthew May, president of May Realty Advisors.

TIAA-CREF's most recent real estate transaction on the Westside was its $54 million sale of the 300,000-square-foot Wilshire Bundy Plaza to Lowe Enterprises in 1999.

Madison Marquette, which bought the property last August after entering into a ground lease on the 52-year-old Westwood property with Federated Department Stores Inc. in 1999, is likely to maintain property management duties on the site, said sources.

Rubber Meets Road

The old West Coast distribution center for Goodyear Tire & Rubber Co. in Commerce has been taken over by a home products warehousing company.

EDS LLC is subleasing the 309,000-square-foot building at 6666 E. Washington Blvd. from CFH Industrial Trust, which took over the primary lease from Goodyear last year and has since upgraded the 50-year old property.

The 62-month deal was worth $5.4 million.

At about 28 cents a foot, the sublease rate is a little more than half the asking rate for industrial space in the Mid-Cities, according to Grubb & Ellis Co.

"That's an older building, and that's reflected in the rate," said Mike Foley, senior vice president at Trammell Crow Co. "There are certain operators that can operate out of the lower clearance (specifications) that can take advantage of the rate."

Foley and Trammell Crow's Rob Antrobius represented EDS while Lee & Associates' Jack Cline and Chuck Campbell represented CFH.

Main Drag

Los Robles Avenue appears to be the hub of activity for the Pasadena investment market.

A joint venture of L.A.-based Sherman Oaks Capital LLC and West Hollywood-based Pasadena Holdings LLC has bought the Pasadena Office Tower from San Diego-based Shidler Group, which had owned the property for four years. The 140,000-square-foot building at 150 S. Los Robles Ave. traded for $22.3 million, or $159 a foot.

Tenants of the building include the City of Pasadena Department of Water and Power and the State of California Department of Rehabilitation.

Cushman & Wakefield Inc.'s Marc Renard represented the seller on the deal, while the buyers represented themselves.

The sale is the third piece in a string of activity along Los Robles Avenue in recent months. Three blocks to the north, Maguire Partners broke ground last month on its 270,000-square-foot Western Asset Plaza at Los Robles and Colorado Boulevard.

And across the street from that development, Trizec Properties Inc.'s Paseo Colorado, between Colorado Boulevard and Green Street and bordered by Los Robles to the east, is close to a $114 sale to a partnership led by Lehman Bros.



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

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