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Friday, Mar 29, 2024

Vulcan to Move Headquarters

Mining giant Vulcan Materials Co. soon will move its Western headquarters to Glendale, bringing about 90 jobs from Los Angeles as the company restructures and battles a hostile takeover bid. At the end of January, the Alabama-based company sold its roughly 77,000-square-foot headquarters on San Fernando Road for $10.3 million, Executive Vice President Doug Marlow of CBRE Group Inc. said. Vulcan plans to move into nearly 41,000 square feet at 500 N. Brand Blvd. in May. The construction materials provider signed the 10-year lease on Brand Blvd. in the beginning of 2011, although the lease remained contingent on Vulcan selling its Glassell Park headquarters, Marlow said. “This is a coup for Glendale,” said Marlow, who represented Vulcan in both deals along with CBRE Vice Chairman Barbara Emmons. With a market value of about $5.7 billion, Vulcan is the nation’s largest producer of construction materials. But the firm has struggled to turn a profit the last two years, and there’s uncertainty about whether its current corporate structure will remain. Vulcan has been fighting a multi-billion dollar hostile takeover offer from Martin Marietta Materials Inc. — a North Carolina-based competitor it once flirted merging with. In February, Vulcan appeared to try to ward off the bid by announcing $500 million in asset sales over the following 12 to 18 months. As of press time, the parties were battling their disputes out in court. Upon announcing its bid, Martin Marietta said the merger would provide annual cost savings of at least $200 million. It remains unclear how Vulcan’s long-term presence in Glendale would be affected if the deal goes through. If Martin Marietta succeeds in its bid, Vulcan’s relocation to Glendale would not be impacted, Vulcan’s West Division spokeswoman Atisthan Roach said in an email. Vulcan’s entrance into Glendale will bring about 90 jobs to the city. The firm is currently building out the West Division’s new home to create “an open-plan environment” designed to foster more collaboration and improve productivity among workers, Roach said. The two-building Vulcan campus at 3200 San Fernando Road in Los Angeles was purchased by Los Angeles-based Shepherd University. Vulcan’s move is just the latest high-profile Glendale relocation, although the city took a hit when Zurich Insurance moved to downtown Los Angeles last year. In December, longtime Pasadena-based law firm Christie, Parker & Hale LLP relocated to 655 N. Central Ave. Senior Vice President Hayden Eaves of Coldwell Banker Commercial North County, who was not involved in the transactions, said the lease “is a nice deal for the city.” The transaction will decrease the vacancy rate in Glendale, because the company is not simply hopping from one Glendale office to another. Eaves said the Glendale office market — while still struggling compared to neighboring Pasadena and Burbank — is improving as more tenants make decisions with eyes toward the future as the economic outlook has improved. But while Vulcan’s move is a win for Glendale, the company is in a consolidation mode. On Dec. 19, Vulcan announced it was laying off about 200 employees and merging its eight divisions into four to trim overhead and increase efficiency. The Western Division was renamed the West Division, but unlike others did not gain additional units. The decision, Vulcan said, would save $30 million annually and was reached prior to Martin Marietta’s offer, according to a news release. Roach said that Vulcan’s move to Glendale was not part of that restructuring effort. Vulcan, she said, decided some time ago to relocate, because it only needed about half the space it occupied in Los Angeles and the firm was attracted to 500 N. Brand Blvd. due to its greater selection of local amenities. All employees from the Glassell Park location are making the move, she added. Ken Hitts, Glendale’s economic development manager, said Vulcan’s arrival will help the city’s real estate market and nearby retail businesses. “There is a certain cache with a headquarters for a company of Vulcan’s size,” he said. CBRE Global Investors purchased 500 N. Brand in late 2008 from what is now Clarion Partners for $71 million, according to CoStar Group Inc., a Los Angeles-based real estate data provider. CBRE First Vice President Scott Crawshaw represented Global Investors in the Vulcan lease. Since its purchase, the real estate investment manager has revamped the 23-story office tower built in 1990. An upscale conference center with satellite televisions and web conferencing has been added and lobbies and restrooms on multi-tenant floors have been redone. Global Investors is currently underway on a $1.4 million elevator modernization program and will soon launch a lobby upgrade, building general manager Debra Greene said.

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