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Nearon Partners Take a Quick Profit in a Slow Market

Nearon Partners Take a Quick Profit in a Slow Market Real Estate by Shelly Garcia When Nearon Enterprises, a Danville, Calif.-based real estate partnership, acquired the former Litton facility in Agoura Hills last December, officials hoped for the best. The office market was softening, but Nearon execs figured they would make some renovations, take a few years to lease the property and then sell it. Six months later, the partnership has sold the property for nothing less than a monster profit. Nearon, whose managing partner in Southern California is former Trammell Crow Co. exec Mark Ossola, just sold the 165,000-square-foot office and R & D; property to Countrywide Credit Industries Inc. for an estimated $21 million, sources said. The partnership made more than $7 million on the deal. That’s close to a 50-percent return on its investment. “We were actively trying to lease it,” said Bob Scullin who, along with Cathy Scullin, Jim Orloff and Amber Guidara, all at NAI/Capital Commercial, represented Nearon in the deal. “However, we had two buyers who were actively interested in the acquisition and to preempt the second buyer, Countrywide stepped up and said, ‘We’ll take it.'” Scullin wouldn’t confirm the purchase price. Neither would Ossola. But there was no disguising the joy he took in the deal. “Nearon was able to realize the same profit as if we went through the renovation and re-lease without having the risk of re-leasing,” he said. “Countrywide was able to acquire a true Class A office building for less than replacement costs.” Litton sold the property, two buildings on 14 acres at 29851 Agoura Road, when the company was acquired by Northrop Grumman. Countrywide had expressed interest at the time, but a deal didn’t materialize. Much of the prior sizzle had gone out of the market by then, but Nearon officials figured they had two years to fill it up. “It was one of those buildings where you could get a tenant in a month or two years,” Ossola said. “We had anticipated a minimum of two years.” The sale closed June 21. Ossola is hoping lightning strikes twice. Nearon now is in the process of buying a 4.5-acre ball field adjacent to the Agoura property and plans to build a 115,000-square-foot office project on the site. The company is currently going through the entitlement process on that project. Meanwhile, Nearon is breaking ground on the second phase of the Airport Business Park, a 350,000-square-foot speculative industrial project in Van Nuys. The developer will construct eight buildings on the site, ranging in size from 30,000 square feet to 60,000 square feet. The complex will be ready for occupancy in May 2003. Move Over, Big Boy EMMIS Communications has found a solution to consolidating its L.A. radio operations, and it’s going to make a couple of odd neighbors. With a just-signed lease expansion, country station KZLA-FM will join KPWR-FM at 2600 W. Olive Ave. in Burbank, the facility that has housed KPWR for the past seven years. KPWR, or Power 106, perhaps best known for its morning show starring Big Boy, plays hip hop and rap. KZLA is strictly country. “I like to use the word interesting,” said Val Maki, senior vice president and market manager for EMMIS Communications Los Angeles. Don’t expect joint appearances by, say, Busta Rhymes and Faith Hill anytime soon. But since Indianapolis-based EMMIS acquired KZLA in 2000, the company has consolidated some of its engineering and sales functions and a number of operating executives oversee both stations. They’ve been shuttling back and forth between KZLA’s West Hollywood facility and Power’s Burbank location. EMMIS has owned KPWR since the 1980s. To solve the commuting problem, EMMIS has increased the space it leases in Burbank to 23,164 from 9,638 square feet it previously occupied. Power had been squeezed for space (no pun intended to Big Boy, who tips the scale at about 400 pounds) and KZLA, which was operating out of about 15,000 square feet in West Hollywood, had a little more space than it needed. The move will give KPWR, which has earned the No. 1 spot in ratings for the two most recent rating periods, some additional room and provide operating efficiencies for the station overall. EMMIS plans to put the West Hollywood facility, which it owns, up for sale. “Anytime you can get more people together under one roof sharing ideas, it promises to be even more innovative and perhaps will bring operational benefits I can’t even measure at this time,” Maki said. The radio stations will have separate studios but will share common space. To make it work, designers are creating a lobby that somehow conveys the KPWR image and the KZLA image in distinct, yet shared, space, Maki added. Rosey Miller and Jason Green, both with Julien J. Studley Inc., represented EMMIS in the $12 million lease deal. Senior reporter Shelly Garcia can be reached at (818) 676-1750, ext. 14, or by e-mail at [email protected].

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