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Friday, Mar 29, 2024

Metro Property in Limbo After Project Falls Through

NBCUniversal will create a new 150,000 square-foot broadcast headquarters on its Universal Studios lot, as plans for an adjacent mega office and studio development that NBC was to anchor have been scrapped. Developer Thomas Properties Group Inc. and media giant NBCUniversal decided to kill the 1.5-million-square-foot MetroStudios@Lankershim project located just outside Universal Studios, a move that caused NBCUniversal to pay a $9 million break-up fee, Thomas Properties said in a Jan. 3 filing with the U.S. Securities and Exchange Commission. “In light of NBCU’s changing requirements for office and post-production space, the planned MetroStudios@Lankershim project was not considered economically viable at this time,” Thomas Properties said in the filing. Instead, NBCUniversal will house the Los Angeles bureaus of NBC News and Telemundo as well as local affiliates in a facility previously occupied by Technicolor. Construction on the upgraded facility is expected to wrap up in late 2013, NBCUniversal said. What will happen to the MetroStudios site is unclear. The proposed development was to be located on land owned by the Los Angeles County Metropolitan Transit Authority. Under a development agreement, NBCUniversal retains the first right to develop the more than 11-acre property at Lankershim Boulevard and the Hollywood Freeway, said Metro spokesman Dave Sotero. “At this point we are just going to keep the lines of communication open,” he said. Sotero said Metro will continue to monitor the real estate market to determine what can be built at the site and when, he said. Kennedy Wilson Finishes Office Deal Beverly Hills-based real estate investment and services firm Kennedy Wilson and its equity partners have finally wrapped up the acquisition of an office portfolio comprising five buildings, including two in the Valley. The final piece of the portfolio was a 126,000-square-foot office building in Woodland Hills known as Warner Atrium, which sold for about $19 million in a deal that closed Dec. 19. Los Angeles-based Jamison Services Inc. was the seller in all five deals, which included the sale of a roughly 180,000-square-foot building along Ventura Boulevard in Encino. The total value of the office portfolio is $143.5 million, Kennedy Wilson said. “We thought it was a great opportunity to reposition assets in some of the stronger office markets in L.A. County,” said John Prabhu, president of KW Commercial Investment Group, referring to the five recent deals. To spruce up the building, which was built in the early 1980s and is about 70 percent leased, Prabhu said Kennedy Wilson will upgrade common areas, landscaping and more. Rents at the building will rise about 5 percent to 10 percent from about $1.80 per square foot after the tenant improvements are completed by mid-year, Prabhu said. Current tenants at Warner Atrium include the law firm Lenske, Lenske & Abramson, EEG Institute and MedPoint Management Inc. Kennedy Wilson owns 37 percent of the five-property portfolio, the firm said. The remaining ownership stake resides with Kennedy Wilson Real Estate Fund IV, Fairfax Financial Holdings Limited and The LeFrak Organization. Prabhu said Kennedy Wilson and its partners will likely hold onto the five buildings for three to five years before putting them back on the market. Lager Properties Closes $3.3 million Deal Woodland Hills-based Lager Properties has purchased an industrial building on Alabama Avenue in Canoga Park for $3.3 million in a deal that closed last month. The purchase was a way for Lager to reinvest the money it received when it sold a building on 22466 Ventura Blvd. in Woodland Hills and avoid capital gains taxes, said Lager partner Cary Gerhardt. That building sold for $2.3 million in a deal that closed in the summer, Gerhardt said. Gerhardt and his partner, Ken La Spada, own Lager. The partners also hold positions at Sierra Pacific Constructors; they are president and vice president, respectively. Sierra Pacific will move from its current location at 22466 Ventura Blvd. to another building Lager owns nearby on Ventura Boulevard in February. Tenants in the fully-leased building on Alabama Avenue include Micro Steel Inc., Western Tool Engineering Inc. and T&S Floors Inc., according to Lager. “For fully-leased properties, the market is good,” said Sam Wagner, senior partner with Told Partners. He and Associate Christopher Swatosh represented both buyer and seller, Bradley Legacy Properties, in the transaction. Senior Partner Barry Schoenbrun of Told Partners represented only Lager Properties. Gerhardt plans several tenant improvements in the next 18 months, including repainting the exterior. He also plans to work with tenants on flexible leases that will institute gradual rent increases because of a still tough economy. Staff Reporter Andrew Khouri can be reached at [email protected]. or at (818) 316-3124

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