78.5 F
San Fernando
Wednesday, Jun 7, 2023

Universal Sale Has Impact All the Way to Burbank Media District

The Burbank and Glendale office markets slogged through a tepid third quarter, with Burbank continuing to lose ground since the move-out of Walt Disney Co. from nearly half a million square feet in the first quarter. Things may be due for a change early next year, however, with the potential for increased activity, particularly in Burbank’s Media District. The $420 million sale of 10 Universal City Plaza – at 35 stories the tallest office building in the San Fernando Valley – was one of the biggest deals in the county so far in 2013. And it could shake things up. Comcast Corp. purchased the Universal City building in the third quarter for its NBCUniversal division, currently the largest tenant at the property. But other tenants there may scramble to relocate given the change in ownership, with many eyeing Burbank. That doesn’t change the fact that over the first three quarters of 2013, 506,700 square-feet has been vacated in Burbank. The slide slowed in the third quarter, but the Burbank submarket still gave back 18,900 square-feet. Its vacancy rate ticked up two-tenths of a point to 20.6 percent in the process, but Class A asking rent nonetheless rose 7 cents to $3.09, according to data provided by Colliers International. One bright spot was strong leasing momentum at The Pointe, a 14-story Media District office tower at 2900 W. Alameda Ave. that had been slow to fill up since it opened in 2009. Now, there is only about 100,000 square feet left in the 480,000-square-foot Class A building, said Patrick Church, managing director at Jones Lang LaSalle Inc. Investor interest in the area also is high. BlackRock Inc., owner of the Alameda Tower at 3900 W. Alameda Ave. in Burbank, which formerly housed Disney before its big first-quarter move, is reportedly close to selecting a buyer for the building. The seller is not expected to significantly rehab the 1980s-era structure before the sale. The Glendale market also saw negative absorption in third quarter, giving back 19,400 square-feet. The vacancy rate edged up by four-tenths of a percentage point to 22.5 percent, but there were some new leases representing back-office users. With the economy improving, landlords raised average Class A asking rental rates by 2 cents to $2.48. But the area still has the lowest rents in the submarket, and is expected to benefit from rising rental rents in Burbank and Pasadena. The city already has nabbed one Pasadena transplant in Avery Dennison Corp., which will consolidate its Los Angeles and Orange County employees in a new Glendale headquarters in early 2014. The label-makers’ three-story Avery Corporate Center at 150 N. Orange Grove Blvd. in Pasadena was sold to an investor group that plans to transform it into a creative office campus, making it the first of its kind in the TriCities market. The newer-style building, particularly popular on the Westside, typically features high ceilings and collaborative, open office space rather than walled-off cubicles and glassed-in private offices. More employees can be housed in an environment designed to encourage creativity and cross-team projects. Also, mobile technology has enabled employees to attend meetings and do their jobs from home, from clients’ sites and on the road. Consequently, some corporations are finding that up to 30 percent of their workers do not show up in the office every day. “It’s not reflective of a reduction in staff but something they call ‘workplace strategy.’ That means reducing the average square footage they allocate per employee by getting away from private offices, said Shadd Walker senior vice president at Collier’s L.A. office. – Karen Klein Main Events Front Porch, a senior housing developer, is moving its corporate headquarters from 303 N. Glenoaks Blvd. in Burbank to 800 N. Brand Blvd. in Glendale. The company, which has communities in California and Arizona, will take 25,000 square-feet as part of an expansion. In July, Cypress Equities of Dallas paid $50 million for the Glendale Marketplace, a 154,420-square-foot retail center next to Americana at Brand. The 128-146 S. Brand Blvd. property is about 77 percent leased with retailers such as Old Navy and Outback Steakhouse. The seller was Eagle Group LLC of Los Angeles. Legendary Pictures, which has co-produced 29 films including “The Dark Knight,” leased space at The Pointe, 2900 W. Alameda Ave., Burbank. The company reached a distribution agreement with Universal Studios after years making pictures for Warner Bros. on its lot. Label-maker Avery Dennison Corp. announced in July its plans to move its corporate headquarters to Glendale, where it also will consolidate a Brea office. The seven-year lease for 54,488 square-feet was signed after Avery sold its three-story headquarters in Pasadena to Foster City commercial and real estate investment firm Legacy Partners for $19.8 million. Hesperia Properties of Irvine bought a 5,671-square-foot office building at 501 N. Central Ave. in Glendale for $2.55 million from North Central Properties GP of Glendale. The fully leased building is occupied by mortgage lender First Franklin Realty and State Senator Carol Liu. The buyer intends to convert the property to all medical office, according to CoStar Group Inc.

Featured Articles

Related Articles