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Monday, May 23, 2022

Office Developers Find Home in Residential Area

The eight-story office building at 520 N. Central Ave. in downtown Glendale sits on a street where several apartment complexes have popped up in the last couple of years. It might not look like a traditional office district, but Dallas-based Lincoln Property Co. and Boston-based Long Wharf Capital are banking on new residential developments to help fuel demand for office space and have plunked down $19.6 million, or $198 a square foot, for the building according to public records.

“Glendale has evolved into a dynamic market with new retail and residential development which is driving demand for high-quality office space,” said Rob Kane, executive vice president of Lincoln’s West Coast division, in a statement.

Seller PGIM Real Estate had purchased the property in 2007 for an undisclosed amount.

Lincoln plans to renovate the lobbies, outdoor spaces, and four vacant floors. The 96,140-square-foot building is 61 percent occupied, according to CoStar. Major tenants include North American Title, Logic Mate International, and H&R Block.

Other companies have also taken a liking to Glendale, where monthly asking rates are $2.66 a square foot, according to Jones Lang LaSalle.

The office building at 500 N. Central, next door to Lincoln’s acquisition, sold in May for $27.3 million, or $221 a square foot, to Volwood Corp. In addition, DivcoWest purchased the 25-story Glendale Plaza office tower in February for $179 million, or $327 a square foot.

Montana Matters

A Mediterranean-style retail building on Montana Avenue in Santa Monica recently sold for $15.5 million, or $1,582 a square foot, according to brokerage NAI Capital.

The deal marked the first time the property, called Piazza Montana, traded hands since it was built in 2001, according to public records.

The buyer, Beverly Hills-based DR Investments, plans to eventually occupy one of the second-floor offices in the 9,799-square-foot building, said Ted Zwicker, a senior vice president at NAI who represented the firm in the deal.

The seller, Norman A. Rubin & Associates, agreed to the all-cash, off-market deal nearly two years ago, but put off the closing date until finding other properties to invest in, Zwicker said. The transaction closed March 29.

The deal comes as retail properties in desirable Santa Monica shopping areas trade between $1,000 and $1,500 a square foot.

“Montana is probably the second-best street in the Santa Monica-Venice area, with Abbott Kinney (Boulevard) being best and Montana second in line,” Zwicker said.

The property is fully leased with tenants including Massage Envy, Frozen Fruit Co., and Panache Coiffure. Montana retail rents range from $4 to $5 a square foot a month, he said.

“The rents have been continuously improving and quality of tenants has been upgraded on a regular basis,” he said.

In addition to its retail and office space, the two-story building has a pair of apartment units on the second floor.

DR is headed by Daniel Gottlieb and Richard Gottlieb, who were principals with real estate investment trust G&L Realty Corp. before it went private in 2006.

Moving Up

Customer service outsourcing firm TaskUs is expanding its office footprint in the Santa Monica Airport, planning to set up its headquarters in a former pan-Asian restaurant overlooking the runway. The conversion will give the company 6,190 square feet compared with 3,678 square feet in its current office on Donald Douglas Loop South.

The city of Santa Monica owns the building and said in a staff report that the lease is for five years at a monthly rate of $19,051, or about $3.10 a square foot, with an annual increase of 3 percent.

TaskUs said it expects to increase its headquarters staff to 70 people from 55 by the end of the year in the new space.

The company hired Sydney-based interior design firm Unispace to convert the former Typhoon restaurant – a Santa Monica standby that closed in November – into office space for an October opening.

Founded in 2008, TaskUs employs 7,000 people worldwide with offices throughout the Philippines and Latin America as well as in New York, San Francisco, and San Antonio.

Corporate Realty Group’s Craig Zund helped broker the lease, representing Santa Monica.

Staff reporter Daina Beth Solomon can be reached at dsolomon@labusinessjournal.com or (323) 556-8337.

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