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Friday, Sep 29, 2023

Oped #1

Goodbye IBM, hello KPMG Peat Marwick LLP.

In a substantial lease deal for downtown Los Angeles, KPMG Peat Marwick has leased 122,835 square feet five full floors in the IBM Tower at Wells Fargo Center and its name will supplant IBM’s atop the Bunker Hill tower.

The Big Six accounting firm is moving from 725 S. Figueroa St. to the tower at 355 S. Grand Ave. in a 15-year lease deal starting in 1999, said Tony Morales, senior vice president at Maguire Partners, which owns the building. The deal, for which financial terms were not disclosed, will put KPMG Peat Marwick into about 60,000 square feet less than it now occupies.

The deal comes in the wake of IBM’s decision to relocate elsewhere downtown and in the Tri-Cities area and, according to Morales, “reaffirms Bunker Hill as the premier location in downtown L.A.”

Although the downtown office market has improved a bit recently, its class-A rents still lag those for comparable space elsewhere in the city, according to the annual Studley Effective Rental Index. The average annual class-A effective rent downtown was $18.59 per square foot in 1997, far below West L.A.’s $26.21 rent.

Representing KPMG Peat Marwick in its deal were Bruce Rutherford, Leon Walker and Robert Zelken of La Salle Partners.

Fantasy for sale

Fantasy Island, a former banquet and party complex in Agoura that had drawn numerous complaints from neighbors, will be sold at auction July 9, said Tim Pluma of Capital Commercial/NAI, who is representing the property owner, Avi Datner.

The property covers 23 acres and is located in a rustic canyon area of the Santa Monica Mountains.

The property had been on the market with an asking price of $3.5 million, but no parties submitted offers, said Barry Bierman of Capital Commercial. So now it is being auctioned off.

The complex was a popular site for weddings and bar mitzvahs, but for more than five years residents in the neighborhood had complained of loud music and traffic from parties held by Datner.

Datner and his family invested several million dollars since 1991 to transform the property by adding a gated entrance, a bridge over a seasonal stream, a 7,500-square-foot home that is more than half completed, utilities, a commercial kitchen, equestrian facilities, parking and landscaping with three ponds.

Last March, Datner pleaded no contest to misdemeanor counts of violating county permit and licensing laws in relation to his operation of Fantasy Island. He has maintained that he operated the business legally.

Bierman said a new owner could build more houses there, in addition to completing Datner’s half-finished house, or use it as a retreat.

Buying spree

CB Richard Ellis still has a severe case of acquisition fever. Just last month it acquired REI Ltd., a London-based real estate services company. Now it has acquired Columbus, Ohio-based Mathews Click & Associates Inc., which the company says makes it the largest diversified real estate services provider in Columbus. Terms of the transaction were not disclosed.

CB has acquired five firms so far this year, as well as formed a joint venture. And it’s not finished yet.

“You need to have a presence and be the No. 1 or 2 player in all major markets around the world and fulfill every need of a real estate client in the ownership cycle of real estate,” said spokesman Cary Brazeman.

Times Square wannabe

The debut of two Times Square-like video billboards on the Sunset Strip is drawing ever closer. Developer Joseph Shooshani plans to start construction this summer on a nine-unit apartment building called Sunset View Plaza, complete with patio, cafe, newsstand and two jumbo video screens on Sunset Boulevard near the intersection of De Longpre Avenue.

With more than 2 million cars passing through the intersection each month, the billboards will provide a great advertising opportunity for entertainment firms, Shooshani said.

“This is a landmark. It’s going to attract so many people and make the area unique,” he said.

The billboards will measure 450 square feet and 64 square feet, respectively, and be devoted to advertising and public arts programming. The larger screen will face westbound traffic on Sunset, while the smaller one will be at street level.

Shooshani said it will be “four times bigger” than the Jumbotrons that the late Billboard Live nightclub erected but removed earlier this year.

Sunset View Plaza is scheduled to be completed next April, while the video screens are to be operational by Jan. 1. The project was designed by architect David Denton of Marina del Rey.

West Hollywood’s Planning Commission has signed off on the project and City Council approval is not required, said John Keho, associate city planner. Two adjacent property owners dropped their appeals after concerns were worked out about traffic and another traditional billboard being blocked, said Keho.

“The city looks forward to it coming on line,” he said. “It certainly should help this end of the strip with more activities.”

Vernon park coming

Xebec LLC, an industrial developer, won approval from the Vernon City Council to build a $28 million business park consisting of five industrial buildings.

The park will be located on 22 acres that Xebec is now in escrow to buy from the Aluminum Co. of America, said John Lehr, a principal with Xebec.

The five buildings, which will contain a combined 550,000 square feet of space, are scheduled for completion in mid-1999, Lehr said. The buildings will range in size from 70,000 square feet to 150,000 square feet, he said.

Lehr said Xebec has letters of intent from several manufacturing companies interested in acquiring four of the build-to-suit buildings. Those prospective purchasers include textile and filter companies, a meat processor and furniture manufacturer.

The project is the first substantial in-fill development slated for the Central L.A. market in several years, Lehr said, adding that demand for industrial buildings of this size far exceeds available supply.

“There hasn’t been this size of land come available for some time,” Lehr said. Vernon is an attractive location, not far from downtown and home to Farmer John’s manufacturing plant, he said.

Irwindale project

In other industrial real estate news, Irwindale Gateway Center, a $25 million mixed-use business park, is now under construction. The center will have 11 industrial buildings totaling 350,777 square feet at Rivergarde Road and Live Oak Avenue, near the 605, 210 and 10 freeways. It’s being developed by Conning Asset Management Co. of Anaheim.

Thomas Taylor, William Kim and Peter McWilliams of the Seeley Co. are the exclusive leasing agents for the new development.

The first phase of the park includes eight for-sale concrete tilt-up buildings encompassing more than 261,000 square feet. Taylor said they will be suited for warehousing, distribution, light manufacturing or research and development.

Elizabeth Hayes covers real estate for the Los Angeles Business Journal. She can be reached at 213-549-5225, ext. 229.

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