Real Estate Column

There will soon be a new neighbor in Warner Center. Lennar Corp., a Miami-based real estate company with most of its holdings in residential properties, has partnered with Voit Cos. in Woodland Hills to acquire properties from Prudential Insurance Co. of America. Prudential put its 35-acre complex on the block with the intention of selling it and leasing back the office space it currently occupies. It drew a high level of interest from a number of potential buyers, and the deal ultimately came down to three finalists: Maguire Thomas Partners, Los Angeles; Carr America, a real estate investment trust based in Washington, D.C.; and Lennar. Lennar has entered due diligence on the property, which is expected to sell for somewhere in the neighborhood of $65 million to $70 million. “It was a very competitive process. There were a lot of people who looked at the deal,” said Mark Williams with Secured Capital, who brokered the deal for Prudential. Two low-rise buildings with a combined total of 500,000 square feet of space sit on the property now, and entitlements exist to build another 1.5 million square feet of office space. Prudential is expected to sign a short-term lease for one of the buildings and a medium-term lease for the second one, which, sources said, added to the value of the building. “You have rental coming in on day one, so during the time you are planning the building and getting entitlements and doing all the other things necessary. They are paying you rent,” this source said. “It’s a helluva deal.” Ric Kern, senior vice president at Voit, said that with the increased strength of the market in Warner Center, the Prudential site offers a lot of opportunity. “There’s surplus land there, so the attraction is the development potential,” he said. Voit founder Bob Voit originally purchased the farmland that once made up the site and sold it to Prudential in the mid-1970s. Lennar, which is one of the nation’s largest residential real estate companies, late last year set up LNR Partners, a commercial real estate division. As a result, said Kern, “They’ve been more active up and down the coast in commercial real estate.” More construction for the Mouse Walt Disney Co. is beginning site work on a 10-story, 390,000-square- foot office building on its studio lot in Burbank. The building is scheduled for completion in mid-2000. Original plans for the building, designed by the late Italian architect Aldo Rossi, contained a logo for ABC. Disney acquired ABC in 1996, but the company says the logo in the original design was “simply a placeholder.” According to David Gensemer, director of corporate real estate and design for Disney, the tenancy of the building has not yet been determined. But don’t be surprised if it turns out to be ABC. J.P. Morgan & Co. is in escrow to acquire the ABC Entertainment Center, a 500,000-square-foot retail and office complex in the center of Century City, according to sources. The leases on the ABC Entertainment Center expire in 2001, with no options to renew. So the television network’s West Coast executive offices will have to move somewhere. Moving into new territory KLST Property, an investment partnership in Santa Monica, acquired a 108,931-square-foot building on Avenue Mentry in Valencia for $6.5 million. KLST, which has primarily invested in residential properties, is beginning to venture into industrial real estate. This acquisition is one of its first in the industrial marketplace. The seller is MTS Products, which occupied a portion of the building and will be consolidating into a nearby building it still owns. CB Commercial Real Estate Group Inc. represented the seller; Westcord Commercial Group in Van Nuys represented the buyer. Katell sells Agoura business park The 115,000-square-foot Agoura Hills Business Park has been sold to William Wilson & Associates for $18.6 million. Selling the 13-year-old, two-building park on Agoura Road was Katell Properties. Bob Safai, owner of Madison Partners, represented both sides in the deal. Major tenants of the park include J.D. Power & Associates, Toyota Credit Corp. and GMAC Candle Corp., Safai said. Calabasas to get new center A new office project has received approvals in the tight Conejo Valley market. The city of Calabasas granted entitlements to Kilroy Realty Corp. to build its 65-acre Calabasas Park Center. The El Segundo-based real estate investment trust plans to begin construction this summer on an 18-acre office park that will be a combination of build-to-suits and speculative buildings. The developer is considering building 300,000 to 500,000 square feet of office space in the first phase, according to John Kilroy, president and chief executive. The REIT already sold off 20 acres within the project to Caruso Affiliated Holdings to build a 200,000-square-foot retail center, and another 4 acres to Homestead Village, an affiliate of Secured Capital, which plans to build a hotel. News and notes Arc Specialties Inc. has signed a five-year lease on a 38,000-square-foot building in the Valencia Industrial Center. The company, which manufactures stacking carts for the supermarket industry, will be leaving the city of San Fernando for its new location. Craig Peters at CB Commercial’s Sherman Oaks office handled the transaction. Greystone Communications signed a $5 million, five-year lease in North Hollywood, taking 22,000 square feet at 5161 Lankersheim Blvd. The cable TV producer is moving from 4717 Laurel Canyon Blvd. Mather Miller of Metrospace/CRESA represented the tenant.