The aerospace and entertainment industries have more in common than some might think at least when it comes to industrial buildings.
Real estate developer Second Street Ventures and real estate investment management company AEW Capital Management LP have partnered to purchase a 117,000-square-foot industrial office building in Burbank from the Holland Family Trust. The deal, which closed Sept. 29, was valued at about $20 million.
The property at 2777 N. Ontario St. was owned by Lockheed Corp. until 1993, and the aerospace company made many upgrades to the building, which it used for high-tech research, said David Jordon, a principal at Marina del Rey-based Second Street Ventures. The aerospace company upgraded the building with auxiliary air conditioning systems and backup electrical systems. These components are valuable to the building’s current tenants: entertainment companies like Warner Bros. Entertainment Inc., DTS Inc. and others that do post-production work.
“Basically if the entire state of California electrical grid failed, that building would still be running,” Jordon said.
And the fully occupied building’s location in Burbank, a haven for entertainment companies, is also a draw, said Carl Muhlstein, senior director at Cushman & Wakefield Inc. He represented Second Street Ventures and AEW on the deal.
The deal breaks down to about $171 per foot and Jordon called it a market-rate deal, adding, “We think there is a good opportunity to add value to the property.”
The building will receive a cosmetic upgrade later this year and rents will likely increase, Jordon said.
“The tenants seem to be happy there and we think it’s an up-and-coming area and we think the high-tech area will continue to flourish in the area,” said Adam Browning, Second Street Ventures principal.
Browning said his firm was attracted to the Burbank area because of its proximity to major transportation corridors.
Bryan Lewitt of Trammel Crow Co. represented the Holland Family Trust on the deal.
La Mirada Deal
VT Industries has a new home for its kitchen countertop manufacturing business.
VT Industries’ parent, Iowa-based Clausen Investments Inc., has purchased a newly refurbished 137,700-square-foot warehouse in La Mirada for $13.1 million.
Clausen Investments’ deal with seller Bristol Industries I LLC breaks down to about $95 a foot.
Gary Blau, staff executive for industrial and commercial real estate firm Goodglick Co., said Clausen Investments liked the 6.3-acre site at 16222 Phoebe Ave. because it has direct rail service options.
“La Mirada is a good industrial city; it is well located with good freeway accessibility and the property is situated on a very large parcel,” said Blau, who represented Clausen.
The property had been on the market for more than six months, priced at about $105 a foot before Bristol Industries lowered its asking price.
“We were following the market trends,” said Adam Deierling, an associate with CB Richard Ellis Group Inc., who represented the seller. “There is still a limited amount of product on the market. The price reduction wasn’t because of a deficiency in the building; it was more just about consistency in the market.”
Blau said it was fortuitous timing that Bristol Industries lowered its asking price just as his client prepared to make an offer.
“We felt it was a good value,” said Blau, adding, “It was a slightly-below- market-rate deal.”
VT Industries will move from Gardena, where it was leasing a 40,000-square-foot property; with the move it will nearly triple the size of its operation.
“There is room for growth,” Blau said.
VT Industries will begin manufacturing at its new site June 1.
American Musical Lease
The American Musical and Dramatic Academy has leased a 39,000-square-foot Hollywood office building, which it will convert to a dormitory for its students.
The building, at 1777 N. Vine St., is owned by Welk Group Inc., and as part of the lease deal the academy will invest between $6 million and $7 million in repurposing the building to house about 200 students. The New York-based academy negotiated a lease deal that also included purchase options details of which are confidential at the request of both parties, said Frank Buckley of Ramsey-Shilling Co.
The building is across the street from the academy’s Los Angeles branch at 6305 Yucca St.
“They’ve been looking fairly extensively to find a solution to their housing shortage,” said Buckley, managing director with Ramsey-Shilling, who represented both sides of the deal. “They looked in a six-block radius of their campus. They came up with a couple of options but this was the most attractive.”
Buckley sold the academy its 60,000-square-foot Yucca Street campus in 2004.
Staff reporter Daniel Miller can be reached at (323) 549-5225, ext. 263, or
[email protected]
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