Office Market At a Glance
Inventory: 19.5 million square feet
Under Construction: 0
Class A Asking Rents: $2.92
The year got off to a tough start in the Tri-Cities market, but things might be looking up, at least for part of the area.
The market’s office vacancy rate increased a point to 18.5 percent during the quarter, according to Grubb & Ellis Co.
Burbank’s office vacancies declined slightly to 17.7 percent, but that marked a huge jump from a year ago when the submarket boasted a 4 percent vacancy rate, the lowest in the county. That increase can be attributed in large part to some big office projects completed last year, including M. David Paul’s 14-story the Pointe and Walton Street Capital’s seven-story, 360,000-square-foot 2300 Empire.
Patrick Church, senior vice president at CB Richard Ellis Group, who represents 2300 Empire, said both projects are in tenant negotiations and 2300 Empire should lease out about half its space this year. Take out the new developments and Burbank’s vacancy rate would be just 3.9 percent.
“There’s a lot of entertainment-related movement within the city, and we’ve had a lot of tenant velocity and flow from Hollywood and the West Valley,” he said.
Pasadena’s vacancy rate rose more than a point last quarter, but remained the Tri-Cities’ lowest at 17.3 percent, while Glendale’s rate climbed to 20.5 percent. Maguire Properties’ new 187,973-square-foot office building added space to the Glendale submarket, and insurance industry mergers have caused some vacancies.
“As this year goes by you’ll start to see some overflow from Burbank to Glendale,” predicted Church. “Tenants who don’t have to be in Burbank paying premium rent will help Glendale have some sort of recovery.”
- Santa Ana-based developer City Ventures LLC paid $15 million for the former campus of Ambassador College in Pasadena. A hedge fund, reported to be Fortress Investment Group, had foreclosed upon the former owners in 2008. City Ventures plans to build 70 luxury condominiums on the 10-acre site. The purchase price also includes 27 apartments and a historic mansion that City Ventures plans to keep.
- 160 El Molino Acquisition LLC sold two apartment buildings at 160 and 174 S. El Molino Ave. in Pasadena for $7.3 million. Private investors bought the complexes, which consist of 53 units, a pool and 67 parking spaces.
- Discovery-Hasbro has signed a six-year sublease to take 30,834 square feet of creative office space on the ground floor of 2950 Hollywood Way in Burbank. Financial terms of the deal with Starz Media were not disclosed. Starz retains more than 80,000 square feet in the building. The sublessee is a joint venture between Discovery Communications and Hasbro for a family and children’s cable network called the Hub, set to begin broadcasting in the fall.
- PNC Bank renewed 13,000 square feet of office space at 2 N. Lake Ave. in Pasadena for another five years.
- Repertory theater A Noise Within will break ground this month on a $13.3 million three-level theater in East Pasadena adjacent to the historic Stuart Pharmaceutical building and near the new Gold Line station. The theater will move from its current 145-seat venue on South Brand Boulevard in Glendale.
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