Worthe Real Estate Group is under contract to buy the nearly vacant Tower Burbank for $109 million, a significant discount to when it last traded hands, the Los Angeles Business Journal reported on Friday.
The 32-story high rise at 3900 W. Alameda Ave. had been largely occupied by Walt Disney Co., but the Burbank company left last spring to consolidate operations in Glendale and its headquarters campus at 500 Buena Vista Ave.
There were reports immediately following Disney’s departure that owner BlackRock Inc. was trying to unload the high rise. The New York asset management company bought the building in 2005 for $167 million.
The Los Angeles paper, a sister publication of the San Fernando Valley Business Journal, citing sources close to the deal, said Santa Monica-based Worthe is expected to close the deal on March 17.
The departure of Disney from the 485,000-square-foot building has spiked the vacancy rate in the Media City’s office market, which in the first quarter exceeded 20 percent, according to the L.A. office of Colliers International.
However, the purchase would give Worthe substantial leverage in the 3.8 million-square-foot market. The firm would control nearly 60 percent of the total space, the L.A. paper noted. Among its holdings are the Burbank Studios, a complex that was long home of “The Tonight Show” until it departed for New York last month.
As a result, Worthe may have other plans for the tower.
Joy Forbes, Burbank’s community development director, said she had heard Worthe may be considering converting the tower into a residential complex or a hotel, but she doubted such plans would be carried out
“Because of building codes for change of use which can be costly, I think he may just be looking for office tenants,” she said, in an email.