The Tri-Cities office market accounted for nearly one-third of all Los Angeles County office space that was absorbed during the second quarter, but it was no thanks to Glendale or Burbank.
Those two markets actually gave back space, while Pasadena saw about 130,000 square feet taken off its market – not a remarkable figure but still its best performance in several years, according to Jones Lang LaSalle Inc.
Much of the action involved smaller deals in the city’s office district on Lake Avenue. For example, Shuster Financial Group LLC moved into 13,000 square feet on 225 S. Lake Ave. The action drove up Pasadena asking rents seven cents during the quarter to $2.69 a square foot as the vacancy rate fell 1.5 points to 15.4 percent.
However, with the economy barely growing and the presidential election causing uncertainty, Arty Maharajh, a research analyst at Transwestern, said Pasadena is not likely to repeat its performance.
Meanwhile, Burbank had the quarter’s weakest showing, giving up more than 17,000 square feet of space, sending its vacancy rate up three-tenths of a point to 16.4 percent.
The problem? Though Burbank has long been home to studios such as Walt Disney Co., the new generation of online entertainment companies strongly prefer Santa Monica, Venice and other Westside communities.
“I think Burbank is going through some growing pains,” Maharajh said.
Of course, every trend has its exceptions, as witnessed by Playboy Plus Entertainment Inc., which signed a 10-year lease at 2300 W. Empire Ave. The company is the online arm of Playboy, so it’s not exactly cutting edge but neither is it a traditional entertainment company either.
As for Glendale, which for years has been the weak sister of Tri-Cities, there was some positive news, even as the market gave up a nominal 5,200 square feet.
Buildings at 801 N. Brand Blvd. and 700 N. Central Ave., which MPG Office Trust Inc., allowed to fall into foreclosure, went up for auction during the second quarter. Sources told the Business Journal that Equity Office Properties Trust purchased both at the beginning of the third quarter.
Also good news was the decision by Yellow Pages to renew its 122,685-square-foot lease at 611 N. Brand for $2.05 per square foot per month. The building, owned by MPG, has been in special servicing since the fourth quarter of last year.
Overall, the Tri-Cities area saw its vacancy rate fall a half-point to 17.9 percent with asking rents rising three cents to $2.86.
– Bailey Brewer
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Yellow Pages renewed for 122,685 square feet at 611 N. Brand Blvd. in Glendale. The five-year deal is for a monthly rate of $2.05 a square foot and includes three months free rent. The building, owned by MPG Office Trust Inc., has been in special servicing.
Online education company Learner’s Digest International LLC signed a lease for 30,000 square feet at 450 N. Brand Blvd. in Glendale. The 11-year deal is for $2.50 a square foot with one year of free rent.
Glendale office buildings at 801 N. Brand and 700 N. Central Ave., which were put into foreclosure by MPG, went up for auction during the quarter. Equity Office Properties Trust purchased the properties in July, sources said.
Playboy Plus Entertainment Inc., the online arm of Playboy magazine, leased 102,000 square feet at 2300 W. Empire Ave. in Burbank. The 10-year lease is for $3.05 a square foot.
Deluxe Digital Studios renewed its lease at 2400 Empire in Burbank for 80,000 square feet and picked up an additional 50,000 square feet. The 14-year deal is valued at roughly $60 million.
Private French school Lycée International de Los Angeles bought the former General Motors Corp. training center at 1105 W. Riverside Drive in Burbank for $11 million from New Urban West Inc. Plans by New Urban for a housing tract were opposed by residents and turned down by the city.
Environmental engineering and consulting company Tetra Tech Inc. renewed its 31,096-square-foot lease in Pasadena at 3475 E. Foothill Blvd. The 118,000-square-foot Class B office building is owned by Wells Real Estate Funds of Norcross, Ga. Length of lease and financial terms were not disclosed.
