There was brisk fourth quarter activity in the Tri-Cities market overall, but Pasadena was the clear winner with 233,108 square feet taken off the market.
“Considering Glendale took a whole year to hit 212,000 (in net absorption), Pasadena really clobbered the market,” said William R. Boyd Jr., senior managing director at Charles Dunn Co.
“East Pasadena has started to fill up, but there was absorption across the board and vacancy rates are down,” said John McAniff, managing director at Jones Lang LaSalle Inc.
Data from Jones Lang LaSalle show the vacancy rate in all three markets dropped in 2012, with Pasadena’s fourth quarter 14 percent vacancy rate 2.5 percent lower than the prior quarter’s level. None of the tri-cities matched its performance in 2011, when the region was coming back from recession, but nearly a half-million square feet were absorbed in 2012 nonetheless.
Glendale was the absorption leader for the year, with 212,000 square feet coming off the market, a “huge and encouraging” sign, according to Scott Unger, an associate at Dunn.
“All three cities have great amenities, but when it comes to saving a lot of money, you’re going to save a lot more in Glendale,” he said, where the asking rents dropped to $2.58 a foot in the fourth quarter.
Asking rents in Pasadena also fell six cents from the year-earlier quarter to $2.57 a foot.
Asking rents in Burbank increased compared with the year-earlier period by a dime to $3.38 a square foot, continuing its status as the most expensive market in the market.
Media and entertainment companies are showing an appetite for more space in Burbank, which saw 70,000 square feet taken off the market, but there is uncertainty due to the possible departure of Walt Disney Co. from the Tower, the city’s signature, 32-story office building. Disney has leased much of the Tower’s 465,000 square feet of office space for more than a decade, but it is not expected to renew.
“The disposition is yet to be determined, but it seems pretty clear they will leave the building and scatter people throughout the market,” said Chris Baer, executive vice president at Avison Young.
More space will be coming on the market in Pasadena, as construction has commenced on a Class A, mixed-use project at 1 W. Green St. in Old Pasadena. A development site is also being marketed on Colorado Boulevard directly across from the Pasadena Playhouse, and 150 N. Orange Grove Blvd. home to Avery International, is expected to be sold.
– Karen E. Klein
- Hudson Pacific Properties purchased Pinnacle I, a 393,776-square-foot, Class A office building at 3400 W. Olive Ave. in Burbank for $212.5 million, or $539 per square foot, from M. David Paul & Associates/Worthe Real Estate Group. The property, which is 92.6 percent occupied, is leased to Warner Music Group and Clear Channel Communications, among other media companies. The second phase of the deal, for Pinnacle II, an adjoining building on 4.3 acres, is expected to close in 2013. The Pinnacle II deal, between the same parties, is valued at $130 million, including the assumption of an $89.6 million loan.
- Ticor Title is moving from Chatsworth to 5,000 square feet at 600 N. Brand Blvd. in Glendale. Property Insight, a real estate information firm, took 33,000 square feet in the same building, which is one of the most affordable in Glendale and as a result saw considerable lease activity, upwards of 50,000 square feet, in 2012.
- Roundabout Entertainment purchased 50,000 square feet of creative office space at 217 S. Lake St. in Burbank to be used as a postproduction facility for film and television. The company had been located on West Burbank Boulevard. Terms were not disclosed.
- Defense contractor Raytheon renewed its lease for 24,000 square feet at 299 N. Euclid Ave. in Pasadena. Terms were not disclosed.
- Whole Foods leased the top two floors at 207 Goode St., Glendale, moving its regional headquarters from Sherman Oaks to an architecturally significant building that has been completely vacant since its construction in 2009. Whole Foods will take 45,080 square feet in the building, which fronts on the 134 Freeway between Brand and Central, and may get rooftop signage.
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