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Wednesday, Jun 7, 2023

Tallest Valley Office Tower Sells for $420 Million

When Comcast Corp. bought a massive 35-story office tower in Universal City earlier this month, it represented a clear sign that the Valley office market is back. The Philadelphia media conglomerate paid $420 million for 10 Universal City Plaza, the tallest office building in the Valley and home of its NBCUniversal arm, buying it from Normandy Real Estate Partners of Morristown, N.J. The transaction ranks as the largest single-property sale in the Valley in more than a decade and follows two smaller but still significant sales: the $45 million purchase of an 182,000 square-foot office building at 5161 Lankershim Blvd. in North Hollywood by Beverly Hills real estate investment trust Kennedy Wilson Holdings Inc. and the $65 million purchase of an 191,000 square-foot office building at 16501 Ventura Blvd. in Encino by Santa Monica real estate investment trust Douglas Emmett Inc. “You could argue there’s been more activity in the last 60 days than the last five years,” said Troy Pollet, senior associate at the Universal office of CBRE Group Inc., who was not involved in any of the deals. “From 2008 to 2012 you’re hard pressed to find a sale that wasn’t distressed.” Pollet, whose office is in the Universal City Plaza building, said the purchase by Comcast is also a reflection of some internal maneuvers the firm may have in the works. Earlier this year, Comcast completed its purchase of NBCUniversal from General Electric Co. The deal was valued at about $30 billion. He said Comcast could be looking to move some of its other divisions into the building, which is only about 71 percent leased, according to real estate data firm CoStar Group Inc. NBCUniversal has about 425,000 square feet of the 813,892 square-foot office tower. Comcast also owns E!, the entertainment cable channel, which occupies about 344,000 square feet on the Miracle Mile, though the unit is in a lease for several years. Comcast also has a majority stake in Esquire Network, which is headquartered in Los Angeles as well. “They obviously have plans for this location and they didn’t buy it without reason,” said Pollet. “It does mean something good for the market, but it wasn’t an investor coming in to pay that amount. It’s different.” Martin Agnew, a vice president of investments at the Encino office of Marcus & Millichap Inc., said despite the unique nature of the acquisition, it still shows the market’s strength. “People are coming out and the market is back. There’s no denying it,” he said, calling “insane” the $516 a square foot price on the deal. “We’re seeing some crazy stuff right now. And I think next year is going to be a really good year as well.” The 10 Universal City Plaza building, designed by Skidmore, Owings & Merrill LLP of Chicago, was constructed in 1984 for Getty Oil Co. NBCUniveral later leased space. The property borders Universal Studios Hollywood theme park and is near the headquarters of movie studio Universal Pictures. The broker on the deal, Doug Marlow, an executive vice president at CBRE, did not return a call seeking comment.

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