The big HMOs in Warner Center have been making headlines over the last couple weeks. Not coincidentally, Warner Center and HMOs are topics that dominate most of this week’s column.
When ever-expanding Washington, D.C.-based real estate investment trust CarrAmerica Realty Corp. spent more than $50 million to purchase a big chunk of the Warner Center Business Park last summer, the REIT also set up a local office from which to expand in the region.
And that office’s latest acquisition is right around the corner from its other 343,000 square feet of Warner Center commercial property holdings.
CarrAmerica on Jan. 31 purchased the 62,000-square-foot Warner Premier office building at 5550 Topanga Canyon Blvd. for $9.3 million.
The 1990-vintage building is 100 percent leased in the wake of two recent lease transactions one of which closed the same day as CarrAmerica’s acquisition of the property from local developer Lawrence Elins.
The Seeley Co. represented both buyer and seller in the deal negotiations, and also represented building ownership in the lease negotiations.
Details of the two lease transactions are as follows:
Last month, International Telecommunications Corp. doubled its offices by relocating within Woodland Hills to 17,000 square feet of space at Warner Premier. Wilkins Randles Associates negotiated that transaction on behalf of the tenant.
Then on Jan. 31 the date of the sale Panorama Software Corp., a long-time subtenant in the building, leased 20,770 square feet directly from CarrAmerica. Corporate Realty Associates represented the tenant.
The sale price factors to $150 per square foot about the same price CarrAmerica paid a group headed by Warner Center developer Bob Voit last summer when the REIT purchased its initial 343,000-square-foot L.A.-area portfolio.
Vernon gets ‘spec’ development
Interestingly, Vernon is one of the cities recently identified as a possible suitor seeking to woo the big HMOs most of which are headquartered in Warner Center, which is in the city of Los Angeles. The HMOs are threatening to leave L.A. in favor of a municipality with a more favorable tax structure.
While Vernon proudly touts itself as “pro-development” and “business-friendly,” it’s clearly known more for its industrial firms than its health care companies.
That’s one reason Vernon recently has been experiencing a substantial amount of industrial development activity of both the “build-to-suit” and “speculative” varieties.
The latest builder to go ahead with a project in Vernon is Xebec, a development firm with offices in Commerce and Irvine. Xebec has just broken ground on a 131,000-square-foot, six-building speculative industrial park just west of the Long Beach (710) Freeway near Loma Vista Avenue and 49th Street.
Seeley is handling sales at the $6 million park, which is called the CMD Industrial Center. It has been designed to feature buildings ranging from 11,363 to 48,702 square feet.
Heading for Newbury Park
The thriving small-business sales/marketing division of one of the big Warner Center-based HMOs WellPoint Health Networks Inc. will relocate and expand from Thousand Oaks to an existing 110,000-square-foot Newbury Park office building, as well as to a similar-sized building to be developed next door.
WellPoint’s new landlord will be Newport Beach-based Sanport Development, which acquired the existing building at 2000 Corporate Center Dr. and 14 adjacent acres within the Conejo Corporate Center from Metropolitan Life Insurance Co.
On a six-acre site, Sanport plans to develop a 111,000-square-foot building on a “build-to-suit” basis for WellPoint. Sanport will retain the other eight acres for up to 130,000 square feet of additional development.
CB Commercial Real Estate Group negotiated the land and building sale on behalf of MetLife. LaSalle Partners represented WellPoint in the lease negotiations. Belgravia Capital Corp. helped Sanport arrange $21.5 million in acquisition and construction financing, including a $19.8 million loan from Guaranty Federal Bank.
An unidentified San Francisco-based real estate investment trust has agreed to purchase the pair of WellPoint buildings in Thousand Oaks when the build-to-suit is completed.
As we reported here last week, office rents on the Westside have been on the rise.
However, some tenants can still find some true bargains out there under certain circumstances.
Commercial Underwriters Insurance Co., for instance, managed to nearly double the size of its offices at the high-end Corporate Pointe complex in Culver City’s Fox Hills district at a pretty favorable rental rate.
Commercial Underwriters cut the cut-rate deal by subleasing nearby offices from a “motivated” tenant stenographer Quixote Steno that was looking to quickly close a transaction with the right subtenant.
The sublease transaction factors to an average monthly rent in the $1.10-to-$1.20-per-square-foot range, including all the “full-service” property management functions.
The latest “direct” (i.e., non-sublease) leases for comparable space in the multi-building Corporate Pointe project typically have been in the $1.40-to-$1.60-per-foot range, said Stone Co.’s Craig Miller, who along with Stone’s Jeff Lipson represented Commercial Underwriters in the negotiations with Quixote.
The deal relocates the insurer’s corporate headquarters from the 100 Corporate Pointe tower to Quixote’s third-floor offices at the 200 Corporate Pointe building. Commercial Underwriters agreed to sublease the offices for the 106-month balance of Quixote Steno’s lease.
Commercial Underwriters has been leasing about 11,000 square feet at 100 Corporate Pointe, but needed to expand and was swayed by the exceptional economics Quixote offered for its high-quality space. Miller noted that Julien J. Studley Inc.’s Michael Catalano and Scott Katcher negotiated for Quixote.