Anyone driving by the unused Chandler Avenue railroad tracks west of Victory Boulevard in Burbank couldn’t help but be surprised by the transformation. Nearby, a group of small, old industrial buildings has been converted into a 27,000-square-foot creative campus called Mariposa Station. The structures, built in 1946, were put on the market in November and were snapped up, leasing in about three months, said Gelena Skya, director at the Sherman Oaks office of Charles Dunn Co. Inc. and leasing agent at Mariposa Station. “There really isn’t much product like this,” she noted, adding there is an offer for the remaining 3,500-square-foot unit. “I could lease up several more of these.” The development illustrates how small developers are revamping older buildings as an alternative to Class A office space in the Burbank market. And Mariposa Station isn’t the only such project. Just a few miles away, not far from Burbank Bob Hope Airport and the Empire Center outdoor mall, some local brokers have taken a collection of six old buildings and renovated them into creative flex space. Those too moved quickly. It took less than 30 days for Brett Warner, principal at the LA North/Ventura office of Lee & Associates and part owner of the development, to put four of the buildings at the Burbank Empire Business Hub in escrow. The four buildings add up to about 15,000 square feet and sold for nearly $4 million. The largest building in the collection, a 6,200-square-foot space at 2405 W. Empire Ave., sold earlier this month to Perfect Circuit Audio for $1.5 million, which moved from about 3,700 square feet of industrial space in Chatsworth. Tanya Berry, co-owner of the company, which buys and sells music and recording equipment, said the move was about finances and location. “When we were looking to move our business, we started looking into prices and location,” she said. “We sell a lot of vintage stuff and sometimes people want to come and see our stuff and we wanted to be closer to all the studios. And it was much cheaper to get a loan and just buy a building and leave us room to grow.” The swift success of both projects may seem surprising at first glance for anyone following the Media City’s Class A office market over the last year. The city took a big hit when Walt Disney Co. left about 470,000 square feet at Tower Burbank, which spiked the vacancy rate in the Media City last year to more than 20 percent, according to the L.A. office of Colliers International. But despite the struggles, asking rents for Class A office space in Burbank are still the highest in the greater Valley region at $3.12 a square foot in the fourth quarter, according to Colliers. By contrast, the units at Marisposa Station were leased for about $1.85 a square foot. And they featured what is all the rage today in commercial real estate: unique architectural details that include high ceilings, exposed brick walls, skylights and glass roll-up doors. “I think you’re seeing the office model shift,” Skya said. “It’s much more affordable here and we did very few concessions. We delivered the space in shell condition and beyond that, the majority of the tenants did the rest.” Turning heads The Mariposa Station buildings at 700-708 Mariposa St., with two additional ones on Chestnut Street, were purchased in December 2012 by Pv Mariposa LLC for a little more than $2 million, according to real estate data firm CoStar Group Inc. The owners were not made available to comment and Skya would not give exact demolition and construction costs, but did say it was “more than a million.” Still, the development costs were low enough that the rents far undercut Class A space. And that lower price was one factor that convinced Tyler Bacon¸ president of Position Music Inc., to move his company into the development earlier this month. The firm works in music licensing, contracting artists to work on TV spots for such films as “Non-Stop,” a movie that came out last month starring Liam Neeson and trailers for video games like “Thief,” also released last month. “I wanted to be in Burbank because of all the production here,” said Bacon, who also runs a small record label and production music library through Position. “And I wanted a space where when people walk in, they’d think ‘I want to be a part of this.’” Bacon’s 5,500-square-foot space certainly turns heads. The company spent about $175,000 on building out the unit, including shipping 100-year-old reclaimed wood from Oregon to build the cubicles. “Part of the desire to be in creative space is who your neighbors are and where you are. I didn’t want an elevator and wouldn’t consider anything corporate,” Bacon said. Position Music was founded in the late ’90s and was previously working out of a four-bedroom townhouse on the Westside. Other tenants at Mariposa station include a lighting company that caters to the entertainment industry, a post production company and an advertising firm. Meanwhile, at the Burbank Empire Business Hub, Warner has several entertainment industry users, including two production companies. He is marketing the two remaining buildings, with expectations that they will sell shortly. “There are two offers on each so it’s a matter of the next 90 days before this thing will be closed out completely,” he said. Warner, Lee Principal Craig Stevens and another investor bought the more than 60-year-old buildings last March for $3 million and have since spent about $1 million on the project, including a tear-down of some buildings and remodeling the rest. Upgrades included installing skylights, new HVAC units, concrete floors and updating the exterior with a corrugated metal look. Warner said they were looking for a Westside feel at Valley prices. “The zoning is industrial, but nothing else about it is typical industrial,” he said. “Empire and Buena Vista is a very high-traffic area and a lot of sites like this are on side streets, not as central. But the proximity to the Empire Center and the airport really drove this.” And though the numbers may make it look otherwise, Burbank is still attractive for entertainment industry companies. “This area comes up in a lot of my conversations. There is a lot of demand there and will continue to be there,” said Brandon Mason, associate at the L.A. office of Avison Young Inc., who represented Perfect Circuit Audio in its building purchase. “A lot of customers are coming out of Hollywood and over the hill, so Burbank makes a lot of sense.”
Creative Office Gets on Track
