A partnership of developer IDS Real Estate Group and Rockpoint Group has put its Washington Mutual campus in Chatsworth on the market after buying the center less than a year ago.
The 231,036-square-foot, 10-story building at 9200 Oakdale Ave. is fully occupied by Washington Mutual Inc. through several leases with up to five years remaining.
The partnership has hired CB Richard Ellis Group Inc.’s Tom Bohlinger to market the property, which has been renamed the West Valley Corporate Center.
The building is expected to fetch close to $70 million or about $300 a foot, and bids are due by the end of November.
The West Valley submarket has seen asking rates jump to $2.31 a foot at the end of September, a 7.5 percent increase from the year ago period, according to Grubb & Ellis Co.
Still, the submarket’s vacancy has been on the rise. The West Valley market posted a 12 percent average vacancy rate at the end of September, a hike from the 10.4 percent vacancy rate in the year ago period, according to Grubb & Ellis.
Recent comparable sales in the area are also hard to come by. Earlier this year, Arden Realty Inc.’s Arden Realty Finance Partnership paid $23.2 million to LAFP Agoura Westlake Inc. for the 115,227-square-foot Agoura Business Park, which works out to $200 per foot.
IDS Real Estate Group and Rockpoint Group acquired the Washington Mutual property, which is near the Northridge Fashion Center, last year as part of a portfolio purchase.
Separately, IDS Real Estate Group has been active in trying to develop a large stretch of downtown L.A near Staples Center.
The Community Redevelopment Agency of Los Angeles approved IDS Real Estate Group’s proposed $70 million purchase of a 6.3-acre site between Eighth and Ninth streets bordering the Harbor (110) Freeway. The project still needs City Council approval. The lot has been entitled for 2.6 million square feet of development, including residential, hotel and retail projects, called the Metropolis.
Lawyer Catcher
Jim Thomas netted another law firm to help fill his City National Plaza in downtown Los Angeles.
Squire Sanders & Dempsey LLP has signed a 10-year lease for 39,667 square feet at 555 S. Flower St. worth $13.3 million, according to Stephen Bay, a vice president at CB Richard Ellis Group Inc. who represented the tenant.
The law firm is abandoning its digs at 801 S. Figueroa St., a 435,000-square-foot tower that Mani Bros. Real Estate Investment Group bought two years ago for $104.4 million.
Thomas Properties Group Inc. lured Squire Sanders & Dempsey as it has done with so many others. To gain tenants, Thomas is giving companies free rent for the duration of the time on existing leases.
Squire Sanders & Dempsey, for example, won’t pay rent to Thomas for the year and a half the firm has remaining on its lease with Mani Bros., Bay said.
“Thomas is locking in tenants whose leases are coming up in a couple years down the road, and then saying they don’t have to pay rent until current lease expire,” Bay said. “It eliminates the double rent exposure a tenant would otherwise have.”
When Thomas Properties bought the twin 1.1 million-square-foot towers, the property was nearly two-thirds vacant. However, he has lured a number of tenants from other downtown landlords with free rent and generous allowances for tenant improvements. Today, the complex is about 60 percent leased.
Other downtown landlords believe the submarket won’t get rent increases until Thomas is able to fill City National Plaza.
The City National complex has recently become a popular address for law firms. Last year Maguire Properties Inc. lost Jones Day from its Gas Co. Tower and Fulbright & Jaworski LLP left the TCW Building, owned by Manufacturer’s Life Insurance. In May, Wilson Elser Mos-kowitz Edelman & Dicker LLP left 1055 W. Seventh Street, a 33-story tower owned by Bristol Group Inc.
Thomas picked-up City National Plaza for a bargain compared with prices of other Class-A office buildings in downtown L.A. that have recently traded hands. Because of that lower price, Thomas can afford to offer bargain rents, Bay said.
CBRE’s Clay Hammerstein assisted Bay on representing Squire Sanders & Dempsey. Thomas Properties was represented internally by Managing Director Kent Handelman.
Pasadena Pick-Up
Cogent Inc. purchased a three-building Pasadena office complex where the security software company plans to relocate.
The company, currently in South Pasadena, bought a 7.8-acre site with office buildings containing about 160,000 square feet. Cogent plans to move its 300 employees into the largest structure, a 107,000-square-foot building. The complex’s other two buildings are occupied by existing tenants.
Industry sources said Cogent paid about $26 million for the property. Founded 15 years ago, Cogent sells software to governments, law enforcement agencies and other organizations to capture, analyze and compare fingerprints.
Cogent was represented by Grubb & Ellis’ Ray Lepone. Representing World Vision International were CBRE’s Bill Ukropina, Damon Feldmeth and Kevin Duffy.
Staff reporter Andy Fixmer can be reached by phone at (323) 549-5225, ext. 263, or by e-mail at
[email protected]
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