Santa Monica Business Park which through no design of its own has become a new-media magnet will soon undergo a major renovation.
Owner Spieker Properties has submitted plans to the city to renovate the 19-building complex on Ocean Park Boulevard on the north side of the Santa Monica Airport.
“It’s a highly visible and known office park and a desirable submarket. We want to enhance that,” said Mark Valentine, vice president with Spieker, a Menlo Park-based real estate investment trust.
Developed in the late 1970s by Transpacific Development Co., the business park was purchased by Spieker in February 1998. It encompasses 13 office buildings (up to three stories in height) and six retail buildings, including banks and restaurants.
Spieker now plans to invest up to $10 million more in the upgrade after hiring the architecture firm Gensler in Santa Monica and landscape architecture firm LRM Ltd. in Culver City.
Valentine said the plan is to add outdoor plazas, paseos, courtyards and additional trees as well as updated signage to enhance the identity of the project and unify its appearance. Spieker also plans to refurbish an existing building for a new conference center and to renovate the lobbies.
The park has filled up, even as newer projects have been built in Santa Monica and many technology and entertainment companies have migrated to creative office projects. The business park is now at 95.5 percent occupancy and boasts a slew of new-media and Internet-oriented companies, including eToys Inc., Cooking.com, Stamps.com, USWeb-CKS and Activision Inc.
“Have we done it by design? Not exactly. They seem to enjoy what we’ve created here,” Valentine said.
Asking rents in the park run $2-$2.15 per square foot per month, far below the $3 rents in newer Santa Monica projects. But that’s expected to change.
“Are we doing this specifically to raise rents? No. Will we enjoy an increase commensurate with the market? Probably,” Valentine said.
Air Force wants to deal
The Los Angeles Air Force Base in El Segundo is considering a somewhat novel concept: providing property to a private developer in exchange for constructing new buildings for the Air Force elsewhere on the base.
“They’re looking at doing something entrepreneurial,” said James Hansen, economic development director for the city of El Segundo. “It’s very conceptual now.”
Driving the concept is the need to seismically upgrade buildings on the base. The Air Force has a split campus, part of it on the southeast corner of El Segundo and Aviation boulevards and part at the northwest corner. The southeast property is the main facility, with several offices and labs. The military weather satellite program is also coordinated there.
The Air Force is exploring the possibility of an agreement with a developer to demolish older buildings on the 42 acres to the southeast and perhaps turn the site into an office, retail or mixed-use development, Hansen said. The developer would then build new facilities on the northwest corner.
“We’re still looking at doing market research to see if it’s feasible,” said John Ryan, a spokesman for the base. He said the Air Force expects to contact developers about the site in the weeks ahead.
To move forward, the base also would need congressional approval and an environmental impact report on any proposed project.
“From our end of it, it’s an exciting proposal,” Hansen said. “There’s the potential to have an economic benefit to the community and generate revenue to offset the cost of rebuilding the base on the northwest quadrant.”
The base is a major economic driver in the area, with some $5.5 billion a year in local contracts.
Hollywood sales heat up
A spate of Hollywood deals is poised to close in June.
A 30,000-square-foot office building at 1741 Ivar Ave. is being acquired for about $2.4 million by Meringoff Equities, which already has two high-rises at Hollywood Boulevard and Vine Street, said John Tronson of brokerage Ramsey-Shilling Co.
Tronson, his brother Steven Tronson, and Chris Bonbright of Ramsey-Shilling represented both sides in the deal.
The Ivar building, which is being sold by John Amiri, is mostly full, with several tenants that perform administrative and back-office functions for the entertainment industry.
CIM Group, which has bought several properties along Hollywood Boulevard in recent months, is in escrow to add the old Woolworth building to its portfolio there.
And over at 7700 Sunset Blvd., Steve Werndorf is selling a 17,000-square-foot creative office building to Heinz Holba, owner of L.A. Models, for about $2.75 million, said Tronson, who represented Werndorf. Cheryl Pestor of Beitler Commercial represented Holba.
And at 5858 Hollywood Blvd., a local investor is buying a 22,000-square-foot office building for about $1 million. It was sold by Russell and Lavona Tinsley. John and Steven Tronson, Bonbright and Frank Buckley represented both sides.
Tronson said the Frederick’s of Hollywood building has also generated a lot of interest. The building had been in escrow for sale to a Canadian firm, but that deal is off and other prospective buyers have stepped forward.
Prices in Hollywood have pretty much peaked at around $150 per square foot.
“There’s been a lot of interest in Hollywood and continues to be. As a natural function of a market starting to mature, sellers have found out the maximum they could get at this time,” Tronson said.
Elizabeth Hayes can be reached at (323) 549-5225 ext. 229.
