As part of its expansion into the California market, Wachovia Corp. has signed a lease in Century City for its new Southern California regional headquarters.
The North Carolina-based bank will occupy 55,000 square feet at Northrop Grumman Plaza as part of a 10-year deal valued at about $20.4 million. The plaza is located at 1800 and 1840 Century Park East.
As part of the deal with landlord CB Richard Ellis Investors LLC, Wachovia was given rights to the 1800 Century Park East building's signage. Currently, Herbalife Ltd. has the rights for the top of the building signage, but next year Wachovia will get that space.
The market-rate deal works out to about $3.09 per square foot per month.
"This is a significant transaction for Century City, which further identifies this market as the central business district for the Los Angeles basin for financial services and law firms," said Stan Gerlach, senior vice president in CB Richard Ellis Group Inc.'s Century City office, who represented the landlord in the deal.
Wachovia's operations at the plaza will include offices and a retail banking branch.
"This market is critical to Wachovia as we begin our expansion into California and the West," said Pete Jones, western banking region executive for Wachovia. "We are excited about signing our lease in Century City for our new regional headquarters for the Southern California market."
Bryan Dunne of CB Richard Ellis also represented the landlord. Wachovia was represented by Justin Collins and Webber Beall of Lincoln Property Co.
A planned renovation by building owner Broadreach Capital Partners LLC was enough to keep CNN at the 6430 Sunset Blvd. building. And in the process, CNN got a pretty good deal.
CNN owner Turner Broadcasting Systems Inc., a unit of Time Warner Inc., has signed a 15-year lease valued in excess of $19 million for its CNN West Coast Bureau, which will remain on two floors in the 14-story building.
For two years, CNN had shopped in areas such as Burbank and Beverly Hills for a possible relocation of its bureau. To get the deal for about 40,000 square feet done, Broadreach Managing Director David Simon said he had to convince CNN that the building is "workable."
As part of the building renovation, CNN will get new ground-floor space dressed up with sleek signage and graphics; the idea is to give the area a Times Square feel, allowing it to do broadcasts from the lobby area.
"The lobby will be totally redone in a way that will make it the type of building a media company (would want)," Simon said.
CNN will take up an additional 5,000 square feet of space and also will get a new rooftop broadcasting area. Renovations are slated to being in early 2007, and CNN will remain in the space during the phased construction. The lease starts in 2008.
Sources with knowledge of the Hollywood real estate market said that the deal breaks down to about $2.30 per square foot per month, with various lease options that escalate annually. The going rate for similar space in the area is between $2.50 and $2.85.
In total, Broadreach will spend about $30 million to renovate CNN's space in the building, including a new "Larry King Live" studio. "It required a lot of experts sitting across the table and throwing substantial ideas on the wall to make it happen," said Nico Vilgiate, of the CB Richard Ellis downtown office, who represented Broadreach.
The deal is considered a coup for Hollywood, where civic boosters have highlighted the need to retain area businesses and office space. "It's a good sign of the recovery trend of businesses coming to Hollywood," said Leron Gubler president of the Hollywood Chamber of Commerce.
CNN did not return calls seeking comment. Rob Waller of CB Richard Ellis also represented the landlord. CNN was represented by Robert Chavez of Guardian Commercial.
Hermosa Beach Sale
Equity Residential, a Chicago-based real estate investment trust that focuses on apartments, continued its pursuit of beach-adjacent property in the Los Angeles area with the purchase of a large apartment building.
Last week, Equity bought The Gallery, a 168-unit apartment building in Hermosa Beach, for $64.6 million from Playa Pacifica Ltd. The company's portfolio already includes nearby property in Hermosa Beach and Playa del Rey.
"It's a market that we like," said Marty McKenna, spokesman for Equity. "We think it's a high quality of life market and that's what we look for when we make acquisitions."
The Gallery, located at 414 Second St., is about three blocks from the beach. It is next to Playa Pacifica, a 284-unit apartment building that Equity bought in June. McKenna said that The Gallery was an attractive investment because of its proximity to the apartment complex.
Ron Harris and Greg Harris of Marcus & Millichap Real Estate Investment Brokerage Co. represented both the buyer and the seller in Gallery transaction.
On Aug 31, Equity paid $27.55 million for Playa Blanca Apartments, an 80-unit apartment property in Playa del Rey. Equity plans to convert Playa Blanca into a condo property.
Staff reporter Daniel Miller can be reached at (323) 549-5225, ext. 263, or firstname.lastname@example.org.
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