Office Market At a Glance

Inventory:

18.6 million square feet


Under Construction:

0


Class A Asking Rents:

$2.92

Are Glendale’s leasing fundamentals coming back?

Many brokers took a look at increased volume and rising rents in the “sandwich” market stuck between super-hot Burbank and super-pricey Pasadena and cautiously said as much.

Fueling the good vibes was a healthy drop in vacancies from 14.7 percent from 16.2 percent, as reported by Grubb & Ellis Co., and more than 43,000 square feet of positive absorption, which led the entire Tri-Cities market for the first quarter.

Annie Kodak, senior vice-president for ING Clarion Partners, says that after her firm re-branded its 400,000 square foot Class A office site at 500 N. Brand Blvd. leasing jumped 25 percent. One huge first quarter deal may be the catalyst to Glendale’s resurgence.

Yellowpages.com left their headquarters in Old Town, Pasadena to occupy almost 74,000 square feet (about 8 percent of Glendale’s vacant space) at 611 N. Brand, a Class A parcel that Warner Bros. bailed out from last year. Not only was it the largest rental deal in seven years for a company not already located in Glendale, but it may also be an indication that nearby Pasadena has hit a wall.

“Since the beginning of last year, Glendale investors have been saying the market was six months away from reaping the low vacancies and high rents of its neighbors,” noted Nico Vilgiate, senior vice president with CB Richard Ellis Group Inc. Vilgiate helped broker Yellowpages.com’s $12.5 million deal with landlord Maguire Properties Inc.

Still, investors still saw room for appreciation in Pasadena, despite flat first quarter rents at $3.18 per square foot and negative absorption.

IDS Real Estate Group sold the 233,624 square foot IndyMac Bank Center, at 888 E. Walnut, to JPMorgan for a whopping $545 per square foot, the largest Class A office deal ever consummated in the Tri-Cities on a price-per-foot basis.

Burbank investors were equally bullish, given the submarket’s 3 percent vacancy rate. Newport Beach-based Higgins Development Partners LLC, announced plans to build a new seven-story office building at 2300 W. Empire Blvd. on what was once a 100-acre Lockheed aerospace site, and is now a retail and office hotbed.

MAIN EVENTS

-Online directory service Yellowpages.com, a division of AT & T; Services, signed a new lease commitment of roughly 73, 611 square feet at 611 N. Brand Boulevard in Glendale from Maguire Properties in a $12.5 million deal.

-Downtown L.A.-based IDS Real Estate Group sold the 233,624 square foot IndyMac Bank Center, at 888 E. Walnut in Pasadena. Institutional buyer JPMorgan paid $545 per square foot, or roughly $127.3 million.

-The northern end of Burbank’s media district, where a 100-acre Lockheed facility once stood, will be the site of a 360,000-square-foot, seven-story new office tower. Newport Beach-based Higgins Development Partners LLC, in a joint venture with Walton Street Capital LLC, will spend roughly $130 million to develop the 6.5-acre parcel at 2300 W. Empire Blvd.

-ING Clarion Partners, which manages more than $45 billion in U.S. institutional investment assets, re-branded its 400,000-square-foot office site at 500 N. Brand Blvd in Glendale, the Lexington.

-Houston-based Lionstone Partner LTD bought the 137,707-square-foot Alameda Media Center at 2901 W. Alameda Ave. in Burbank from MJ Realty Group for $46.3 million, or roughly $344 per square foot. The seven-story office building was a build-to-suit for entertainment firm Ascent Media.