So much for grand schemes.
Last summer, LuxCore LLC announced plans to build a $150 million motion picture and television studio on a 12-acre site in Culver City. The project was widely touted as the city’s first ground-up studio development since Metro-Goldwyn-Mayer Inc. opened its gates there 79 years ago.
But LuxCore was never able to find a financing partner for the new studio, which would have been built on vacant land along Slauson Avenue at the terminus of the Marina (90) Freeway.
In February, the company announced that it was teaming up with Zurick Kemper Stevens insurance fund and the New York-based Apollo Real Estate Fund on a new project: a multimedia office campus.
Now, however, those partners have dropped out, and LuxCore has abandoned the project site altogether, according to Martin Kistler, a principal with the company. But he said LuxCore still wants to find land and a financial partner to build sound stages elsewhere.
The trouble is finding a lender willing to underwrite development of speculative sound stages.
“It’s the chicken and the egg syndrome,” Kistler said. Many production companies have said they would use stages if LuxCore had them right now, but no one is willing to pre-lease studios a prerequisite for financing, he said.
The property has now gone back to its note holder, the Bank of Montreal. The bank is already in negotiations with other potential buyers, according to Jack Kane, director of the real estate division.
Culver City’s Redevelopment Agency, meanwhile, is back to Square One for developing the site.
“It’s too bad We were really excited about that kind of a use,” said Miriam Mack, the city’s redevelopment administrator.
The multimedia campus proposal was the latest incarnation for the land, located east of the Fox Hills Mall. The property has been entitled since 1981 to build three office towers, Mack said, and anyone who wants to build anything else such as sound stages or a different configuration of commercial office would have to go through a complete entitlement procedure.
Baxter inks Van Nuys deal
The first phase of the Lewis Business Center, a 360,000-square-foot industrial park under construction in Van Nuys, just closed its first deal. Baxter Healthcare signed a 15-year, $21 million lease to take 117,000 square feet at the San Fernando Valley development. Baxter’s Hyland division, which stores and distributes raw materials, will move in next fall. It will be consolidating operations from offices across California.
John Lewis, president of the Lewis Co., said he was pleased to have such a “preeminent company” taking almost one-third of the first phase of his park, which he will sell to Prudential Insurance Co. upon completion. Cushman & Wakefield’s Dave Hasbrouck and Mike Clark represented Lewis, and Phil Lombardo and Mark Leonard of Trammell Crow Co. represented Baxter.
L.A.’s biggest mall landlord
The West L.A.-based real estate investment trust Westfield America Inc. is set to become the largest mall landlord in Los Angeles County if its purchase of TrizecHahn Corp.’s portfolio goes through. Westfield announced last week that it paid $1.44 billion to purchase TrizecHahn’s portfolio of 13 malls on the West Coast. Westfield teamed with Maryland-based Rouse Co. to make a $2.55 billion bid for the Hahn portfolio, then the two REITs split the 20 malls regionally.
In Los Angeles, Westfield adds Santa Anita Fashion Park, Los Cerritos Center and the Fox Hills Mall to its local portfolio. It already owns the Eagle Rock Plaza, Eastland Center, The Plaza at West Covina and Topanga Plaza malls.
TrizecHahn already had plans in the works to renovate several of its malls before the sale was announced. Randy Smith, executive vice president of Westfield, said the company has not yet determined whether it will carry through with TrizecHahn’s plans once it closes on the purchase, which is scheduled for the fourth quarter.
But Smith added that “from a global perspective, our mission is to boost the value of our properties through renovations” such as adding multiplex theaters, new tenants or remodeling.
Westfield handles the property management on another major West L.A. mall that’s on the auction block, the Westside Pavilion on Pico Boulevard. Chicago-based Heitman Properties, which owns the mall, and officials at Eastdil Realty, the real estate firm that is handling the sale, declined to discuss the property.
Riordan backs Smedra
Mayor Richard Riordan last week announced his support for Ira Smedra’s controversial Village Center Westwood retail-entertainment center. The $84 million project is set to go before the Planning Commission later this month and already has the support of Councilman Michael Feuer. Residents and several local property and business owners oppose the football field-sized development as too large. Riordan said the project will “enhance and turn around an area of our city that has not lived up to its potential for many years.”
News & notes
Kennedy-Wilson Inc. paid $14 million to purchase 6380 Wilshire Boulevard, a 130,000-square-foot office building in the Miracle Mile market. The L.A.-based real estate company plans to spend $4 million to renovate the property and market it toward entertainment tenants pushed out of the pricier Westside market. Bob Safai of Madison Partners represented both the buyer and seller in the transaction.
Nearby, a similar strategy appears to be working for the owners of the 6500 Wilshire building.
Building representatives have been plugging up the 80,000 square feet that Chubb & Sons Inc. insurance company vacated when it moved downtown last March. The software company Bowne Global Solutions signed a six-year, $3 million lease to take 20,000 square feet. Matthew Miller and Roy Longman of Metrospace/CRESA represented Bowne in the deal.
The 6500 Wilshire building expanded Katz Communications’ lease by 25,000 square feet, and it also added several new tenants under 10,000 square feet, including: the financial news service Bloomberg LP, United TV and the talent agent Don Buchwald & Associates. The building, which was 68 percent leased after Chubb left, is now 85 percent full with the remainder of the space in negotiations, according to Scott Murphy of Prentiss Properties, which handles the leasing for the building.
Further south in Playa del Rey, more office space is coming to the market. Raytheon Co. plans to sublease the 500,000-square-foot former Hughes Electronic Corp. headquarters office building. Raytheon acquired the lease on the property, located at 7200 Hughes Terrace, when it purchased Hughes’ aerospace and defense units. Most of the building’s operations have since been relocated elsewhere. Raytheon is currently interviewing commercial brokerage firms to handle the listing for the space, according to Toni Simonetti, director of media relations for Raytheon.
Staff Reporter Joyzelle Davis covers the real estate industry for the Los Angeles Business Journal.