-Worthe Real Estate Group leased 120,000 square feet at the 487,000-square-foot Tower Burbank to iHeartRadio, which will move from its location at 3300 W. Olive Ave. Asking rates at the Tower are about $3.50 to almost $4 a square foot.
-SunTrust Banks Inc. of Atlanta sold the DreamWorks Animation headquarters campus in Glendale to El Segundo’s Griffin Capital Essential Asset REIT for $215 million. SunTrust bought the campus, at 1401 Flower St., from the studio for $185 million six months prior.
-OneWest Bank signed a 135,000-square-foot deal to relocate to 75 N. Fair Oaks, the Parsons headquarters now owned by Lincoln Property Co. Terms were not disclosed.
-UBS Realty Investors bought Burbank Empire Center office buildings at 2350 and 2400 W. Empire Ave. from CBRE Global Investors Ltd. for $80.4 million in August.
-Los Angeles County’s largest credit union, Logix Federal Credit Union, announced it would be leaving its Burbank headquarters for a new 170,000-square-foot facility in Santa Clarita. The credit union had been headquartered in 75,000 square feet at 2340 N. Hollywood Way for almost three decades but said it outgrew the space.
Strong leasing activity boosted the Tri-Cities office market in the third quarter.
The market, which includes Burbank, Glendale and Pasadena, saw its vacancy rate drop nine-tenths of a point from second-quarter levels to 14.2 percent, according to Jones Lang LaSalle Inc., as tenants picked up 224,287 square feet of space. The vacancy rate was 16.4 percent in the year-ago quarter.
That tightening allowed landlords to drive up Class A asking rates 3 cents to $2.92 a square foot.
Pasadena was the largest source of positive absorption, reporting more than 140,000 square feet taken up in the third quarter. Its vacancy rate dropped 1.4 points to 14.5 percent as asking rents rose 3 cents to $3.02 a square foot at Class A properties.
But some of the largest deals weren’t done at the pricey new or newly renovated properties that have hit the market this year. Instead they were at more modest buildings. For instance, One West Bank signed a lease to take 135,000 square feet at 75 N. Fair Oaks, the Parsons headquarters now owned by Lincoln Property Co. Rates at that building are around $3 a square foot.
Scott Steuber, principal at Avison Young in downtown Los Angeles, said the lower rents at the Parsons property are likely what sealed the deals for these value-seeking tenants. Most of the new or newly renovated properties in Pasadena are asking around $3.50 to $4 a square foot.
“The new crop of landlords with new projects are seeking potentially unjustified high rents,” Steuber said, noting there’s a significant amount of vacant space left in Pasadena – 1.4 million square feet to be exact. “(Deals like these) will continue to happen until an outside tenant comes in and takes down one or two of these big chunks of viable space.”
Meanwhile, Burbank’s vacancy declined three-tenths of a point to 15.1 percent – a significant improvement from the 16.9 percent last year. The submarket reported positive absorption of 27,166 square feet. Landlords moved Class A asking rates up a cent to $3.16 a square foot.
Worthe Real Estate Group attracted iHeartRadio to its recently renovated Tower, a 487,000-square-foot office building at 3900 W. Alameda Ave. The Internet radio company is in negotiations for 120,000 square feet at the project.
Nearby, Glendale’s vacancy rate, at 13 percent flat, was the lowest of the Tri-Cities. It was a 1.1-point improvement from the second quarter and a 3.9 percent improvement from a year ago. Landlords kept asking rates flat at $2.52 a square foot, undercutting the higher prices in Burbank and Pasadena.
Among the top deals, DineEquity Inc. announced intentions to move its Applebee’s International Inc. chain headquarters to its Glendale corporate office at 450 N. Brand Blvd. from Kansas City, Mo.
– Jacquelyn Ryan
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