Metro-Goldwyn-Mayer Inc.'s once-mighty lion is going on a diet.
Even before the investment consortium led by Sony Corp. completes its acquisition of MGM, the group has hired Jeff Pion, an executive vice president at CB Richard Ellis Inc., to sublet an undetermined amount of MGM's office space in Century City and Santa Monica.
Pion didn't return calls last week. Brokers who applied for the job said that while a decision hasn't been made on the exact amount of space that will be cut, MGM is likely to free up more than half, or about 250,000 square feet, of office space it leases in Century City and Santa Monica.
A final decision was expected by this week. Sony is considering taking some of MGM's Century City space.
Brokers said the consortium plans to keep MGM as a free-standing company that will continue to produce between five and six movies a year, but its staff of thousands could be trimmed to about 250.
Paige Taylor, an MGM spokeswoman, said the company isn't commenting on anything related to staffing until after the acquisition is complete.
"We do have the intention of keeping all MGM employees together in one location," she said.
The prospect of such a large amount of sublease space coming available has some Century City landlords concerned. Sublease space is typically cheaper than the rents charged in a direct lease, and can deflate asking rents in a submarket.
Compounding the challenge is Trammell Crow Co.'s construction of a 790,000-square-foot Century City office building, under way at 2000 Avenue of the Stars. The building is 40 percent pre-leased to Creative Artists Agency.
"You have two Class-A real estate properties that could be colliding," said Neil Resnick, senior vice president and managing director of the West L.A. office of Grubb & Ellis Co.
Brad Cox, a Trammell Crow principal, said he believes Century City will be able to absorb both.
"We are very comfortable that the MGM space will have been subleased and Jeff (Pion) will have done a great job," he said.
Century City leasing activity has been steady, Cox said. Law firm Proskauer Rose LLP expanded and renewed its lease last month at 2049 Century Park East. Terms on the 15-year lease, for 54,000 square feet, were not disclosed. Sources said the total value was close to $32.6 million.
Trammell Crow's Bob Pearson represented the landlord, and Madison Partners Principal Chris Houge and CB Richard Ellis Executive Vice President Stewart Eisenkraft represented the law firm.
In the same building, three tenants also took 45,700 square feet of sublease space United International Mortgage and Investment Inc., digital media and marketing firm DNA Studio and music industry publisher Radio & Records Inc.
The tenants were represented by Newmark Pacific, which said in a press release that the tenants are paying about half the building's $3.15 a foot asking rate.
After four years of negotiations, the City of Redondo Beach has finalized its purchase of a 6-acre industrial site owned by Verizon California Inc., a unit of Verizon Communications Inc.
Redondo Beach is buying the land, which is half of Verizon's total site, for about $4.8 million. City officials plan to consolidate three municipal maintenance yards, totaling about 4.5 acres, onto the location at 2819 W. 182nd St.
The city's former maintenance sites one of them near the beach will either be redeveloped or sold, according Justin Schnuelle, a senior associate at Wald Realty Advisors, which advised the city on the deal.
Officials in Redondo Beach avoided eminent domain, a tool that other municipalities have used to counter soaring land prices. "The city didn't want to go through the whole process, which tends to take longer and can be more expensive than outright buying the land," Schnuelle said.
Verizon will continue to own and operate the adjoining parcel as a service yard for its maintenance vehicles. Verizon was represented by Newmark Pacific Principal Lee Black and attorneys Michael Brill and Joan Wolff of Van Etten Suzumoto & Becket LLP.
Online marketer Vendare Media Corp. inked a long-term lease for a new headquarters in El Segundo worth about $12 million.
In July, Vendare Media will move from Sherman Oaks to Continental Development Corp.'s Plaza at Continental Park at 2101-2121 Rosecrans Ave.
The seven-year lease for 67,000 square feet includes building signage, according to Gary Horwitz, a first vice president at CB Richard Ellis, who represented Vendare Media.
The value of the lease was not disclosed, but real estate sources pegged it at about $2 a foot.
Horwitz said Vendare Media wanted to stay in Sherman Oaks but couldn't find sufficient office space. "We canvassed that market quite a bit," he said.
"There's no opportunity to grow there, so we migrated the search south and began to focus on the South Bay."
Founded in 1999, Vendare Media employs about 200 and is majority-owned by Pasadena-based Idealab. The move to Plaza at Continental Park comes with the ability to expand within the 3-million-square-foot mixed-use business park, Horwitz said.
Torrance Center Sold
A private buyer is picking up the three-building Torrance Center South for about $25 million. Laguna Hills-based Muller Co., in partnership with GMAC Commercial Mortgage Corp., has owned the 143,000-square foot office park, built in 1988, for four years.
The property, located at 21151-21221 S. Western Ave., is 90 percent occupied. The largest tenants are Science Applications International Corp., which takes 50,000 square feet, and ADT Security Services Inc., which has 35,000 square feet. Two months ago, both tenants renewed their leases for five years.
Despite early predictions of robust dealmaking for 2005 and a few high-profile deals, merger and acquisition activity fell in the first quarter, both nationally and locally.
*Staff reporter Andy Fixmer can be reached by phone at (323) 549-5225, ext. 263, or by e-mail at email@example.com .
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