With average Beverly Hills office rates nearly the most expensive in L.A. County, interested buyers are paying top-dollar to ferret out off-market deals.
Earlier this month, Irvine-based Starpointe Ventures LLP wrested the 103,000-square-foot office building at 450 Roxbury Drive from longtime owner Pair City Development Inc. by paying $43 million, or a head-spinning $418 a foot.
The 25-year-old building, which sits on a long-term ground lease, is 90 percent occupied to entertainment law firms and real estate development company Regent Properties Inc.
Meanwhile, a partnership led by investor John Bendheim has picked up 331 N. Maple Drive from a partnership of Praedium Group, Lincoln Properties Inc. and Credit Suisse First Boston LLC for about $29 million. The deal was brokered by Ramsey-Shilling Co. and Madison Partners.
DreamWorks SKG co-founder David Geffen sold the office building last year to the partnership for $31.5 million. Though it’s a lower sales price, the partnership was able to recoup about $12 million of the investment when DreamWorks Music bought out its lease when it left the building.
The anchor tenant, Madonna’s production company Maverick Films, occupies just 20 percent of the roughly 84,000-square-foot building, leaving plenty of upside room on the leasing side.
Only Santa Monica and Century City had higher asking rates than Beverly Hills, where average asking rents at the end of December were $2.79 a foot, according to Grubb & Ellis Co.
Rents at the 10-story office building at 450 Roxbury Drive start at about $2.75 a foot and rise to $3.25 a foot for the top floor. Rents at 331 N. Maple Drive start at about $3.00 a foot.
Gary Weiss, a principal at Madison Partners, who was not involved in either deal, said the prices real estate investors are paying to own Beverly Hills office buildings exudes confidence in the market.
“This market is on fire,” he said “It’s real estate 101. People will pay a lot for well-located real estate and you don’t get a much better than Beverly Hills.”
MGM Deal
Lehman Bros. Holdings Inc. has inked a roughly 43,000-square-foot lease in Century City’s MGM Plaza, according to sources close to the deal.
The New York-based investment bank is consolidating Westside offices, most already in Century City, into the new location.
Terms weren’t disclosed, but assuming a 10-year lease at current Century City average asking rates of $3 a foot, the deal could be worth about $14.5 million.
While the Lehman Bros. lease won’t represent a huge net-absorption for Century City, it’s a sign of confidence in one of the weakest Westside office markets.
Also signing on was real estate firm BentleyForbes, which inked a 10-year deal for 14,000 square feet worth $6 million. The firm will move to the 23rd floor from its offices at 2049 Century Park East.
Ron Wade and Stan Gerlock of CB Richard Ellis represented BentleyForbes and Mark McCaslin of McCaslin Co. represented the building owners.
Though the area has some of the highest rents in the county, they have fallen over the last several quarters as landlords continue to cut deals that lock in tenants before Trammell Crow Co.’s 790,000-square-foot 2000 Avenue of the Stars comes online next year.
Also troubling the market is Metro-Goldwyn-Mayer Inc.’s acquisition by Sony Corp., which could flood the area with all or much of the 400,000-square-feet MGM leases in its namesake high rise, L.A.’s newest.
For that reason, the deals are a boon to the building’s owner, JMB Realty Corp. Jeff Pion and Clay Hammerstein with CB Richard Ellis Inc. represented Lehman.
School’s Out
Pacific Christian School has listed its 7.4-acre Pasadena-adjacent campus for sale as a potential residential development site.
The school, at 625 Coleman Ave. in Los Angeles, is asking about $8 million. Bidding on the property, which contains only four buildings, is expected to begin March 1.
Built nearly 100 years ago as a seminary for the Free Methodist church, the campus has been used most recently as the grounds for the Christian middle and high school, which has about 120 students.
Parents of children attending the academy were informed last June the school would be closing.
The situation has unnerved nearby residents and the Arroyo Seco Neighborhood Council, which held a hearing on the matter.
An El Sereno charter school intends to bid on part of the property, according to the neighborhood group, which has also alerted the California Charter Schools Foundation and the Los Angeles Unified School District of the parcel’s availability.
Councilman Antonio Villaraigosa, whose 14th District includes the site, told the neighborhood council that his office has been contacted by parties interested in subdividing the parcel but that he supports a use of the campus that he feels benefits the community, such as a church or school.
But at a price of more than $1 million an acre, not many schools or churches may have the cash needed to acquire the parcel and nearby homes are selling for in the mid-$700,000 range, according to the property’s marketing materials. Chris Ligan and Mark Tarczynski of CB Richard Ellis have the listing.
Change at CB
Brett White’s elevation to chief executive of CB Richard Ellis Group Inc., one of the world’s largest commercial real estate services companies, was part of a long-planned succession strategy that has had White and outgoing CEO Ray Wirta jointly running the company for some time.
White, who has worked his entire career at CB Richard Ellis, now oversees much of the L.A.-based commercial real estate services firm’s global operations on a day-to-day basis.
White started as a salesman in 1984 and became president in 2001. He was instrumental in guiding the company’s initial public offering last summer.
Wirta joined CB Richard Ellis with its acquisition of Koll Real Estate Services in 1997 and was named chief executive in 1999. He will continue to be a member of the board and will serve as vice chairman for two years. When White assumes the role of chief executive the position will be combined with that of president.
Staff reporter Andy Fixmer can be reached by phone at (323) 549-5225, ext. 263, or by e-mail at
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