Tack on another casualty to the demise of IndyMac Bancorp: the Pasadena real estate market.
With the Pasadena-based lender in federal receivership and most of its employees laid off, the company put 360,000 square feet back into a market that now sports a vacancy rate of 10.8 percent, more than 4 points higher than a year ago.
The Tri-Cities priciest submarket also has seen its per-square-foot asking rents fall more than 10 cents to $3.51 since the second quarter, according to Grubb & Ellis Co.
"Pasadena has gone backwards," said John McAniff, managing director with Jones Lang LaSalle Americas Inc. "After many years of solid growth and rental depreciation, the very quick demise of IndyMac is starting to resonate throughout Pasadena."
It's resonated particularly strong for Wells REIT and JPMorgan Chase, which respectively owned IndyMac's 170,000-square-foot space on Foothill Boulevard and its 190,000 square foot headquarters at 888 E. Walnut St., said Patrick Church, senior vice president with CB Richard Ellis. The two companies are looking for new tenants.
Overall, the Tri-Cities market registered only nominal changes from the previous quarter. The overall vacancy rate dropped two-tenths of a point to 10 percent since the second quarter while Class A asking rents fell only 8 cents to $3.12 per square foot.
Propping up the region was the Burbank market, which had the lowest vacancy rate in the county at 3.5 percent. It also was one of only three county submarkets that saw its vacancy rate drop.
That's partly because the economic crisis has yet to substantially impact the entertainment companies that occupy much of its real estate. Also the area is drawing tenants from Hollywood and the West Valley, said Church.
Meanwhile, Glendale is saddled with the highest vacancy rates in the Tri-Cities at about 15 percent, though tenants unable to find space in Burbank have been kicking the tires on a few 10,000 to 200,000 square feet spaces, brokers said.
- With Pasadena-based IndyMac Bancorp on the block, a total of 360,000 square feet is back on the market. JP Morgan Chase is looking for a tenant for IndyMac's vacated 190,000-square-foot headquarters at 888 E. Walnut St., and Wells REIT is shopping 170,000 square feet on Foothill Boulevard. A source said Wells was in negotiations with a tenant to take all of the space vacated by the one-time lender.
- HDR Architecture Inc. renewed its lease with South Lake Avenue Investors LLC for 21,008 square feet of office space at 251 South Lake Ave. in Pasadena. HDR also expanded by 20,700 square feet for a total consideration of about $11.2 million. An engineering and architectural firm, HDR designs drinking water treatment facilities and natural gas terminals.
- Rexford Industrial LLC, a Los Angeles-based industrial developer and investor, purchased a 1-acre property that includes 31,546 square feet of building space in Pasadena for $4.7 million. The property is at 89-91 N. San Gabriel Blvd., 2670-2674 Walnut St. and 2675 Nina St. Rexford plans to renovate the property's six buildings for either light industrial or creative office space. Rexford bought the properties from former owner-user Tsann Kuen Enterprise Co. Ltd., a Taiwanese household products manufacturer.
- Walt Disney Pictures signed a four-and-a-half-year lease for 37,005 square feet of space at 3900 West Alameda Ave. in Burbank. The new lease represents an expansion for Disney; it already occupies 452,000 square feet of the building. The landlord is West Alameda Tower LLC. Financial terms were not disclosed.
Office Market At a Glance
Inventory: 18.6 million square feet
Under Construction: 817,400 square feet
Asking Rents: $3.12
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