Lincoln Property Co., sensing an opportunity to get ahead of rising rents in Hollywood, has swooped in to buy a three-building package in Burbank from Beverly Hills’ Kennedy Wilson.
In a deal that closed in the last couple of weeks, Lincoln acquired the Burbank Collection, a package of three buildings and two parking garages at 303 and 333 N. Glenoaks Blvd. and 300 E. Magnolia Blvd., for $84.2 million, or about $258 a square foot.
David Binswanger, executive vice president at Lincoln, said the Dallas company has holdings in Glendale, Pasadena and Hollywood and has seen values begin to rise.
What’s more, he said, he feels the market is on the cusp of repeating a trend last seen in the late 1980s, when creative businesses were chased out of Hollywood by rising rents.
“We are always looking for good deals,” he said. “With Glendale, Pasadena and Hollywood we could define the flow of tenants and make a fairly educated assessment of what was happening in Burbank. This presented a good size asset for us to get involved with.”
Representatives of Kennedy Wilson did not return a call seeking comment.
Binswanger said his company plans to spend heavily to open up the common areas and create more flow among the buildings to establish a campuslike feel. Additions will include outdoor fire pits and a food truck program, amenities that he said are available in the nearby Media District but not in downtown Burbank.
There is room to reposition the buildings. Of the three, the 63,000-square-foot Magnolia property is in the best shape, with the vacancy rate at just 4 percent and asking rents of about $2.40 a foot a month, according to real estate data provider CoStar Group Inc. At 303 N. Glenoaks, a 13.7 percent-vacant, 180,000-square-foot building, asking rents range from $2.15 to $3 a foot, according to CoStar. The greatest vacancy in the package is at 333 N. Glenoaks, which is just 76 percent leased. Asking rents there are about $2.40 a foot a month. In the first quarter, average asking rents in the city were $3.24.
An investment broker covering the market who was not involved in the deal said that given the package’s location outside the hotter Media District, the price Lincoln paid made sense.
Properties in Burbank, he said, have traded for around $300 a square foot, and as high as $350 a foot in the Media District.
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