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By ELIZABETH HAYES
Staff Reporter
Pasadena, which has the lowest office vacancy rate in the Tri-Cities, has seen an increasing amount of investment activity lately.
The latest deal is far from the key Lake Avenue office corridor, on the eastern side of town. Kearny Real Estate Co., an affiliate of the Morgan Stanley Real Estate Funds, has acquired a 300,000-square-foot office complex from Teachers Insurance and Annuity Assn. and plans to redevelop it into a new office campus. The acquisition and redevelopment will amount to about $32 million.
The property, at 250 N. Halstead St. and 300 Foothill Blvd., is on more than eight acres and composed of two, three-story office buildings and an industrial building. Only one of the three buildings is currently occupied.
Kearny plans to demolish the industrial building and renovate and expand the office buildings by about 12,500 square feet, to 138,000 and 115,000 square feet, to create a two-building, low-rise campus with a central plaza and garden area. A restaurant and parking structure are included in the plan.
Kearny Vice President David Simon said the goal is to redevelop a functionally obsolete project into a “modern, high-quality campus facility that would meet the needs of large space users in the Tri-Cities area.” He said it will be one of the largest blocks of modern office space on the 210 Freeway corridor when completed, and will provide a lower-cost alternative to the other side of town.
Todd Doney, senior vice president in Cushman Realty’s downtown L.A. office, and Martin Morgenstern, national managing director with Cushman Investment Services in Newport Beach, represented both Kearny and Teachers. Doney and his associate Nico Vilgiate will be the exclusive leasing agents for the property.
Shuwa spurns Douglas Emmett
Shuwa Corp. is considering a plan to reject a bid for its big office towers at 1900 and 1901 Avenue of the Stars in Century City by Douglas Emmett Realty Advisors in favor of another buyer, according to real estate-industry sources.
While Douglas Emmett had a letter of intent to buy the two buildings for around $225 million, it appears that Shuwa may go instead with Divco Properties in San Jose, which has done a lot real estate investing with Wall Street funds.
Tokyo-based Shuwa owns 8.5 million square feet of real estate around the country, including several office towers around L.A., and was selling its portfolio last fall before deciding to sell the buildings piecemeal.
New job for Muhlstein
On the job-hop front, Carl Muhlstein has left his post as a senior managing director with Insignia Capital Advisors and last week joined Cushman Realty Corp.’s commercial brokerage group downtown. He will work with both corporate and institutional clients.
“I was recruited away, and I’m joining a management team with whom I have a background,” Muhlstein said.
At Insignia, where he worked in 1997 and 1998, he developed strategies with the New York office and handled acquisitions and dispositions for large institutional owners, private investment funds and corporate real estate departments. Muhlstein was with PM Realty Group before Insignia, serving as managing director for the Western region. And prior to PM, he had positions at Wilrock National, Tishman Speyer Properties and Cushman & Wakefield.
Big Santa Monica deal in works
Cupertino-based Symantec Corp. is in discussions with Arboretum Gateway in Santa Monica to buy the project and occupy 110,000 square feet.
If the deal goes through, Symantec would then lease out the balance of the 200,000-square-foot project.
“We’ve had numerous discussions with them. A deal has not been made,” said William Hammerstein, a partner with Arboretum Gateway.
The project, at Cloverfield Boulevard and Colorado Avenue, is a joint venture between Apollo/Pacifica and Three Coast Limited. It is scheduled for completion at the end of September, Hammerstein said.
Symantec is the No. 2 utilities software company in the United States and has a large presence in Santa Monica, at the neighboring MGM Plaza.
Old department store revived
Interior remodeling begins this week on the former Robinson’s building at 600 W. Seventh St. in downtown L.A. The property is expected to house a Rite-Aid and Office Max on the ground floor and telecommunications companies on the upper six floors, said John Gordon, managing partner with Aston Partners, which represents the building’s owner, a Toronto-based investment firm.
The building, erected in 1916 as the first Robinson’s department store, is being taken back to its shell, and the fa & #231;ade preserved, Gordon said. The total project will run around $50 million, he said.
The store closed in the early ’90s and the building has sat vacant ever since. The new owners began acquiring the property soon after it closed, but then the real estate recession hit. Negotiations with Price Club a couple of years ago never panned out.
But now Rite Aid has executed a lease and Office Max has signed a letter of intent.
News & Notes
Los Angeles-based Windsor Capital Group (parent company to Windsor Hospitality Group) has received $233 million in financing it will use for a variety of things, including refinancing existing debt, hotel development and growth. The financing was placed by L.A.-based M.A. Cohen & Co. with Starwood Financial Trust and Greenwich Capital Financial Products.
Combined Properties Inc., the largest private owner of strip shopping centers in the Washington, D.C. metropolitan area, has acquired the 48,467-square-foot Center at Coldwater in Studio City for $9.9 million. The center includes a Bistro Garden Restaurant, Baja Fresh, Western Bagel and other specialty and service retailers.
The University of Phoenix leased 44,460 square feet at 299 N. Euclid Ave. in Pasadena. Owner Arden Realty was represented by Dan Alle of the John Alle Co. and the university was represented locally by Ed McKeegan of MEI Real Estate Services.
The Los Angeles Unified School District has bought a 65,000-square-foot parcel on West Seventh Street between Parkview and Grandview streets in the Mid-Wilshire area for a primary center, serving kindergarten through second-grade students. John Alle Co., which represented LAUSD and the seller, the International Brotherhood of Electrical Workers Local 11, reported the sales price as $1.5 million. The school will be operational by July 1 and will serve 360 students.
Elizabeth Hayes can be reached at (323) 549-5225 ext. 229.
