LNR Warner Center Buildings Bought for $104 million

LNR Warner Center III, the most recently constructed buildings in the LNR Warner Center complex, was sold to RREEF, a real estate investment manager, for an estimated $104 million. The two, five-story buildings total 358,684 square feet. One of the buildings is fully occupied by United Online Inc., which operates Internet service providers NetZero and Juno. The other building, still under construction, is about 20 percent leased. Tom Bohlinger, senior vice president, investment properties at CB Richard Ellis, who represented the buyer in the deal, would not disclose the purchase price, but he did concede that pricing for these Class A office buildings continues to escalate. “All these buildings are still a tremendous value,” he said noting that land for new development is scarce and leasing activity has picked up considerably since last year. “Tenant demand is starting to gain momentum and significant rental spikes should be in full swing by the end of the year,” Bohlinger said. Newer product particularly has received much buyer interest, Bohlinger added. “The newer product is in greater demand,” he said. “It’s more energy efficient and it’s less capital intensive to own than the older properties.” LNR Warner Center, located at Canoga Avenue and Burbank Boulevard, will encompass 1.3 million square feet of office properties when fully developed. LNR Property Corp., which is developing the center, has sold off the individual buildings as they have been completed. Another 500,000 square feet of land remains for development.