Pinnacle Deals Buck Downward Movement in Tri-Cities Market
By ANDY FIXMER
In a year that saw the Tri-Cities real estate market put more than 213,000 square feet back onto the market, the Pinnacle office complex, developed by M. David Paul & Associates, was a leasing winner.
The first phase of the two-building, 625,000-square-foot project, on West Olive Avenue in Burbank bucked the odds by gaining two sizable tenants and accounting for the year’s positive absorption numbers in the Burbank market.
Carl Muhlstein, vice president at Cushman & Wakefield Inc., which represented the project, called the big leases with Clear Channel Communications Inc. and Warner Music Group, a subsidiary of AOL Time Warner Inc., “a fantastic coup.”
Warner Music Group signed a 17-year lease for 195,000 square feet and Clear Channel signed a 13-year lease on about 99,000 square feet. Both companies are paying close to $3 a square foot over the terms of their leases, which are valued at $9.9 million and $3.9 million, respectively, according to sources close to the negotiations.
The deals account for more than half the 400,000 square feet in the first phase of Pinnacle, at 3300 W. Olive Ave., where 85 percent of the available space has already been leased, according to Muhlstein.
Each company had been in the market for three years, looking to consolidate operations scattered throughout Los Angeles County.
“We looked in West Hollywood, we looked in Tri-Cities, downtown and in the Wilshire corridor,” said Sherie Yearton, a vice president of Jones Lang LaSalle, who helped broker the deal for Clear Channel. “But of all the locations we looked at, Pinnacle matched most of their criteria.”
Clear Channel, through rapid expansion nationwide in the 1990s, owns nine AM and FM radio stations in the Los Angeles market. But in order for a location to work for Clear Channel, it needed a “line-of-sight” with the top of Mount Wilson, where the bulk of the company’s broadcasting towers are located.
For Warner Music Group, the move to Pinnacle is a consolidation after a decade’s worth of acquisitions, including Atlantic Recording, Electra Entertainment, Maverick Records and Rhino Entertainment, among others.
Unsung Deals – Project: The Pinnacle Building
Players: Carl Muhlstein, vice president at
Cushman & Wakefield; Sherie Yearton and Christopher Cooper, vice presidents at Jones Lang LaSalle, and George Katunich, executive vice president of Travers Realty Corp.
The Deal: Muhlstein leased 294,000 square feet of space in the Pinnacle building in Burbank to Clear Channel Communications Inc. and Warner Music Group, a subsidiary of AOL Time Warner Inc. The deals’ combined worth is estimated at $13.8 million and represents a sizable lease during a flat real estate market in the Tri-Cities area, which consists of Burbank, Pasadena and Glendale.