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Saturday, May 28, 2022

Burbank Remains Swamped With Space; Glendale Maintains Pace

While the commercial office market firms up elsewhere in Los Angeles County, Glendale and Burbank are still experiencing vacancy rates among the highest in the region. Burbank continues to suffer the vacancy of 450,000 square feet at Alameda Tower, which once housed the Walt Disney Co. but has been empty since the company moved out early last year. That much space on the market has brought down average asking rents. A year ago, average rates were at $3.02 a square foot. In the second quarter that figure had dropped to $2.90 a square foot, down 5 cents from first quarter. The bright spot for the quarter were multiple transactions that together took more than 137,000 square feet off the market and reduced the vacancy rate to 19 percent from 21 percent, according to the L.A. office of Colliers International. “That absorption rate mimics some of the highest quarters Burbank has ever experienced,” said William R. Boyd Jr., senior managing director of brokerage services at Charles Dunn Co. Inc. “The vacancy rate is still at a record high, but going from 21 to 19 is a huge drop.” A notable transaction was the 80,000-square-foot Burbank Civic Plaza, which sold last month to Hanhai Investment Inc. of San Jose for $22 million. The 250 E. Olive Ave. building was unloaded by Cusumano Real Estate Group of Burbank. The Class A four-story office building was constructed in 2005 and consists of ground-floor retail with office space on the top three levels. The building was 91 percent occupied at the time of sale, with tenants including Sega and FedEx Office. In Glendale, the commercial office market incrementally improved with the vacancy rate down more than six tenths of a point to 20.5 percent in the second quarter. And with 26,700 square feet removed in first quarter and 37,000 square feet taken off in the second, momentum is good. As with Burbank, average asking rents in Glendale have been dropping. At $2.38 a square foot in the second quarter, prices are down 7 cents from first quarter, perhaps aiding in activity such as the lease of 16,500 square feet in the U.S. Bank building by Property Insight in May. The title company took the fifth floor of the six-story, Class A office building at 600 N. Brand Blvd. One of the more interesting sales in the quarter was the May purchase of 1800 S. Brand Blvd, a historic building that once housed Seeley’s Furniture and still sports the company’s distinctive sign. The 64,290-square-foot building, on the southern end of the city’s commercial corridor, was sold by East West Bank to Jade Enterprises, a family-owned developer that also recently purchased the historic downtown headquarters of Home Savings of America out of bankruptcy. On the industrial side, there was good sale and leasing activity in both Burbank and Glendale. West Coast Customs took 40,000 square feet in a 10-year lease deal at 2101 Empire Blvd. in Burbank. The car-styling company is the subject of a reality TV show that airs on Fox Sports channel. No Static Pro Audio, which designs and installs audiovisual systems at high-end venues, leased 15,955 square feet in a five-year deal at 3223 Burton Ave., also in Burbank. – Karen E. Klein Main Events – A two-property multifamily portfolio in Glendale traded hands in May for more than $24.5 million. The 49-unit Villa Monaco at 1234 E. California Ave. and the 36-unit Villa Geneva at 1304 E. California Ave. were purchased by the Stanley Sirott Trust of San Dimas from Jay de Miranda of Rolling Hills Estates. Both properties were built in the late 1980s. The seller was the original developer of the properties who wanted to retire. – L.A. real estate investment firm Rexford Industrial Realty Inc. purchased two buildings in Burbank for $15.4 million last month. The 130,000-square-foot property at 2980 and 2990 N. San Fernando Blvd. was purchased from an undisclosed private ownership group. The buildings are leased to Senior Aerospace SSP, which manufactures high-pressure air ducts for planes. The company is a unit of Senior Plc in Hertfordshire, England. The company has four years remaining on its lease and has been in the facility for more than 50 years. – The 208-unit Elevé Lofts and Skydeck in Glendale sold for $70.5 million in June. The 200 E. Broadway building was purchased by Equity Residential of Chicago from Post Investment Group of Los Angeles. The 128,000-square-foot building is 90 percent leased, according to real estate data firm CoStar Group Inc. The property is a mix of one- and two-bedroom apartments and was developed by Post in May 2013. – The Colorado Villas in Glendale sold last month for $12 million. The 1130 E. Colorado St. building was sold by CT Glendale LLC of Torrance. The 39,500-square-foot building was constructed in 2011 and includes 4,113 square feet of retail space. The property has a total of 28 units – 25 condo units and three retail spaces. The multifamily portion is fully leased, while the retail space is vacant, according to CoStar. Burbank Office Market At a Glance Inventory: 6.82 million square feet Under Construction: 0 Class A Asking Rents: $2.90 Glendale Office Market At a Glance Inventory: 6.19 million square feet Under Construction: 0 Class A Asking Rents: $2.38

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