The War Between Glendale Malls Keeps Going and Going

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Developer Rick Caruso is vowing to proceed with his antitrust lawsuit against General Growth Properties Inc. despite losing in court in a related case.


Caruso Affiliated Holdings, which is building the Americana at Brand development across from General Growth’s Glendale Galleria, was ordered Jan. 23 by a L.A. Superior Court judge to return a list of Galleria tenants and related financial and contact information to mall owner General Growth.


General Growth had accused Caruso of illegally obtaining the documents amid ongoing proceedings in a lawsuit Caruso filed in 2004 accusing the mall operator of unfair competition and anti-trust violations. (The latter lawsuit was prompted by a bitter fight that General Growth launched against the Americana development that only ended when city voters approved the mixed use project in a referendum.)


Caruso has agreed to return the documents, but he is scoffing at an offer by General Growth for both sides to drop all litigation despite the possibility he could be ordered to pay damages in the latest case.


“Their suit against us is unmerited, it is based on information that is publicly available,” said Caruso. “They are desperate people. They are trying to find any way to make their lawsuit go away because they’re scared.”


David A. Battaglia, an attorney for General Growth and partner at Gibson Dunn & Crutcher LLP, confirmed that the mall operator would indeed drop the document lawsuit if Caruso would in turn end the antitrust case.


“We have offered to have both sides go their separate ways,” Battaglia said. “Mr. Caruso is a fairly litigious person and that offer has not been acknowledged.”


The antitrust case is scheduled to go to trial this summer in Los Angeles Superior Court.


No matter the outcome of the lawsuits, the two mall owners will likely duke it out for years to come as their neighboring developments vie for new tenants and other opportunities, said Christine Scheuneman, an attorney with Pillsbury Winthrop Shaw Pittman LLP who has represented mall owners.


“In this context I doubt very much that would be the end of the story,” she said. “If you have two malls one across the street from the other, you have a position of direct competition and there will be other instances of conflicts.”



Airport Record

With the recent sale of the office building at 5200 W. Century Blvd., a record-setting per-foot price has been set for the main street near Los Angeles International Airport, according to real estate industry experts.


The 10-story structure was sold for about $63 million on Dec. 28, with J-M Manufacturing Co. Inc. paying about $200 a foot for Arden Realty Inc.’s building, according to industry experts with knowledge of the LAX-area market.


J-M Manufacturing, a subsidiary of Formosa Plastics Corp., will occupy most of the 325,000-square-foot Class A building’s top two floors.


J-M Manufacturing, a piping manufacturer based in New Jersey, will move into the building this fall, bringing the occupancy rate up to 93 percent ahead of the average for the area. According to data provided by Grubb & Ellis Co., there was more than 1 million square feet of vacant space in the LAX-Century Boulevard office market.


Peter Best of Jones Lang LaSalle Inc. said the building’s low vacancy rate can be attributed to the quality of the building. He said it is the best in the area.


“It is the quality of the lobby and the quality of the construction Arden did,” said Best, who represented Arden in the sale. Arden had owned the building since 1994 and did a remodel of the property several years ago. Arden has sold 13 assets in December and January after being acquired by GE Real Estate in May.


Some may view the sale as a sign the LAX office market is improving, and Best said that future airport expansion plans “will make it a stronger market.”


Before settling on the property, the piping firm looked for an investment property in areas like the South Bay and Burbank. “The availability for large contiguous space that could be purchased as an investment and used as an owner is very scarce,” said Best, adding that the building will become J-M Manufacturing’s West Coast headquarters.


Jones Lang LaSalle will handle the leasing and management of the property.


J-M Manufacturing was represented by Robin Leamy of Mohr Partners. Lisa St. John and Dan Baumeister of Jones Lang LaSalle also represented the seller.



Staff reporter Daniel Miller can be reached at

[email protected]

or (323) 549-5225, ext. 263.

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