Vacancy rates dropped by more than a point in both Glendale and Burbank over the summer, but the Tri-Cities office market was held back by a lackluster quarter in Pasadena.
Overall, the Tri-Cities area absorbed nearly 109,000 square feet, cutting the vacancy rate by four-tenths of a point to 17.5 percent, according to Jones Lang LaSalle Inc. Asking rents held steady at $2.86.
Glendale, which has been one of the region’s softest submarkets for years, saw 81,000 square feet taken off the market during the July-September period. It has now had positive net absorption in four of the last five quarters.
The city’s vacancy rate, at 22.3 percent, is down more than a point from last quarter and nearly three points from a year ago, due in part to compelling deals that have lured tenants away from Pasadena and Burbank, brokers said.
William R. Boyd Jr., senior managing director at Charles Dunn Co. Inc., noted that Glendale has been outpacing its neighboring cities all year, taking 149,000 square feet off the market, while both Burbank and Pasadena have given space back.
“Glendale landlords have woken up to the challenge of lowering the largest vacancy rate of all three markets and they’re the most aggressive,” he said.
Burbank, which saw its vacancy rate jump two years ago when a couple of large projects opened, is slowly seeing space absorbed. Its vacancy rate fell nearly one-and-a-half points to 15 percent as 104,000 square feet were taken off the market. Almost half of that went to Warner Bros., which leased 42,000 square feet at 4411 W. Olive Ave., a three-story building in the media district.
After a sterling second quarter, Pasadena gave back 76,000 square feet in the third, pushing its vacancy rate back up more than a point to 16.5 percent. Asking rents in the area fell four cents. But the market was buoyed by a major investment from the Irvine Co., which purchased Western Asset Plaza at 385 E. Colorado Blvd. for $144.5 million, about $560 a square foot.
“This is the first time they’ve bought a building on the east side of Los Angeles and they are obviously believers in the tenant base and structure of Pasadena,” said John McAniff, a managing partners at Jones Lang LaSalle. “That’s a lot to spend on office space. This is obviously a long-term, patient investment.”
Pasadena also saw an uptick in smaller deals.
“That’s something we haven’t seen in the last two quarters,” said Carl Anderson, executive vice president of NAI Capital in Pasadena.
Irvine Co. acquired Western Asset Plaza at 385 E. Colorado Blvd. in Pasadena, from Centurion Real Estate Partners for $144.5 million. The five-story, 256,703-square-foot building is located directly across from the Paseo Colorado shopping plaza and was built in 2004 as a partially adaptive reuse of a former Woolworth building. It was 96 percent occupied at time of sale.
Jacobs Engineering relocated from Arroyo Parkway in Pasadena to 155 N. Lake Ave., where it took 83,936 square feet in an 11-year lease. Structural engineering firm Saiful/Bouquet relocated to the same address in 2011.
Online ticket broker Goldstar signed a four-year lease at 141 S. Lake Ave. in Pasadena to accommodate expansion. The company had been headquartered in 3,000 square feet on Green Street. The Lake address building houses restaurant Celestino on the ground floor. Goldstar will occupy 12,000 feet on the second floor; the deal was estimated at close to $1 million.
In August, Autry National Center took occupancy at 210 S Victory Blvd. in Burbank, a 77,158-square-foot property it already owned. The site is the largest available freestanding creative office campus between Burbank and Warner Center.
EverBank, a mortgage bank headquartered in Jacksonville, Fla., leased 3,375 square feet at 701 N. Brand Blvd. in Glendale for a branch location. The space was formerly occupied by U.S. Bank. The five-year deal with landlord California Credit Union, which is headquartered in the eight-story building, was estimated at $4.9 million for five years.
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