Several large projects announced in the second quarter promise to reshape the Valley region’s real estate markets.
In April, Burbank-based Warner Bros. Entertainment announced the acquisition of a nearby studio complex and the creation of two Frank Gehry-designed office towers — so-called “icebergs” because of their massive white presence. Worthe Real Estate Group and partner Stockbridge Real Estate Fund will develop the complex for Warner Bros., a unit of WarnerMedia Inc., which will become the sole tenant.
Warner Bros. will complete its purchase of Burbank Studios and build the new Gehry office towers by 2023. The new headquarters has been dubbed Second Century Project, in homage to the movie studio’s 2023 centennial. Construction begins this fall, with Phase I occupancy slated for 2022 and Phase II in 2023.
As part of the deal, Worthe and Stockbridge will purchase three office buildings currently owned by Warner Bros.— the Triangle Building (4001 W. Olive Ave.), Glass Building (3903 W. Olive Ave.) and Wood Building (111 N. Hollywood Way) — plus the 30-acre Warner Bros. Ranch located on Hollywood Way.
Warner Bros. Executive Chief Financial Officer Kim Williams said in a statement that the deal will be “an investment in our employees, our creative and business partners, and the Burbank community that will continue to be our home for decades to come,” while the Gehry towers promise to become a 134-freeway visible camera magnet.
Europe-based retail center developers Unibail-Radamco-Westfield has been very active in modifying its existing malls, including in Woodland Hills.
But it is outside of Warner Center in Santa Clarita Valley where Westfield will spend $100 million to transform a former Sears site into the Patios Connection, building on the success of the retail center’s existing element, The Patios. Westfield will redevelop the eastern portion of the property to feature Santa Clarita’s first luxury cinema, health and fitness center and specialty brand shops, plus Santa Clarita’s second Costco location and another 320 parking spaces.
Purchases and leases
Elsewhere during the quarter, several major purchases and leases closed.
In April, Harbor Freight Tools USA Inc., formerly based elsewhere in Calabasas, signed a 228,990-square-foot, 15-year lease at Corporate Center Calabasas, according to CBRE Group Inc., the brokerage that cemented the deal. The national retailer committed to relocating its headquarters from 26541 Agoura Road in Calabasas to Corporate Center Calabasas, at 26565-26709 Agoura Road, a campus which consists of six office buildings.
CBRE agents Tom Dwyer, Michael Slater, Caroline Bigelow and Andres Uribe represented landlord Majestic Asset Management Inc. in the deal. CRESA Vice Chairman Matthew Miller repped the tenant.
In June, New York Life Real Estate Investors bought the North Hollywood office building at 5161 Lankershim Blvd. for $103 million. The structure, located on the southwest corner of Lankershim and Magnolia boulevards, spans 205,286 square feet, has a 703-space parking garage, and is home to tenants such as Bento Box animation studio, TV production company Endemol Shine North America, and, by fall, co-working leader WeWork.
June also saw Westlake Plaza Centre 2, an 84,098-square-foot office building at 2829 Townsgate Road in Westlake Village, sell for nearly $18.3 million.
Newmark Knight Frank Executive Managing Director Sean Fulp, Managing Director Ryan Plummer and Director Mark Schuessler represented owner Kilroy Realty Corp. in the sale to real estate investment firms Majestic Asset Management and The Johnston Group.
“This deal may have been on the smaller side for most institutional investors but it was as complicated as any institutional deal,” Johnston Group President Jeff Johnston said in a statement.
Westlake Plaza Centre 2, part of the three-building Westlake Plaza Centre office park, came surrounded by amenities such as Gelson’s Market and Hyatt Regency Westlake.
Harbor Associates acquired Encino Office Park, a four-building, 213,459-square-foot, transit-oriented office campus, for $47.9 million in April.
Anthony Delorenzo, Mark Shaffer, Todd Tydlaska and Mike Longo of CBRE represented the seller. CBRE’s Shaun Moothart, Bruce Francis, Dana Summers and Katie Diaz arranged the financing through PNC Bank for the buyer.
Located at 6345 Balboa Blvd., the office campus — one of the few in Encino — was 89 percent leased at closing time.