Celebrating Glendale Office Market’s Upside

Piedmont Office Realty Trust Inc. must have been prescient. The Atlanta-based firm acquired 800 N. Brand in Glendale for $157 million ($297.72 a square foot) — a solid six years before the 2008 debut of Caruso’s Americana at Brand, which has been widely credited as jump-starting downtown Glendale’s renaissance and creating concentric circles of retail, housing and office prosperity. Piedmont, which in December 2002 could not foresee all the office and restaurant activity currently exploding in Glendale, bought the building — long home to Nestlé USA, Children’s Hospital and Union Bank — for a simple reason. “It’s a great piece of real estate,” said Joseph Pangburn, executive vice president of Piedmont’s Southwest Region, who flew in from Dallas to attend a Feb. 15 function held at 800 N. Brand’s patio. City of Glendale Economic Development and CBRE co-sponsored the mixer, where speakers included Glendale Mayor Vartan Gharpetian, Glendale’s Interim City Manager Yasmin Beers, Community Development Director Philip Lanzafame, and CBRE Los Angeles Vice Chairman R. Todd Doney. About 50 members of the local real estate community turned out, including Gabriyel Mamikonyan and Harry Keshishian of Apollo; Lauren Nesmith of Charles Dunn Co.; Kesenia Richardson and Paul Ayoob of CBRE; Shaun Stiles of Cushman & Wakefield; and Glendale City Councilmembers Ara Najarian and Paula Devine. Nestle Crunch bars and boxes of Nerds were plentiful, as the candy maker had occupied a dozen floors in the tower for more than two decades. Nestlé plans to leave Glendale and relocate its U.S. operations to Virginia this summer. With Nestlé’s exit, CBRE plans to sublease the office space as its lease runs through March 2021. “It’s the largest contiguous block of square-footage in the Tri-Cities,” CBRE’s Ryan Pettersen said. Gharpetian touted Glendale’s near-future projects, including the Armenian-American Museum, the Museum of Selfies and four major hotels. They include the 140-key Hotel Indigo, the 107-key Louise Hotel, the Aloft and the AC. Gharpetian also wants to see downtown gain comedy and jazz clubs. “I never thought I would say this, but Glendale is sexier than Pasadena,” said the mayor. Even though Piedmont has since divested itself of most L.A.-area assets, the firm has held onto 800 N. Brand with no plans to relinquish it. The company remains confident that all 12 floors will find tenants. After all, Pangburn said, this building is Glendale’s greatest office-market moment. “It’s iconic,” he said. “It’s a better piece of real estate now than 15 years ago when we bought it.” American Homes’ Q4 Things are looking up for American Homes 4 Rent — the Agoura Hills single-family home rental company — according to the company’s fourth quarter and full-year report. “American Homes 4 Rent completed a successful year, generating a 6 percent improvement in annual (core net operating income) after capital expenditures from our comparable same-home pool,” said Chief Executive David Singelyn in a statement. In the fourth quarter, total revenues increased 6.7 percent to $243 million, up from $228 million for 2016’s fourth quarter. Net loss attributable to common shareholders totaled $22 million (8 cents a share), compared to losses of $2.4 million (1 cent a share) in 2016’s final quarter. “Looking forward to 2018,” Singelyn said in a statement, “I remain bullish on our future based on the strength of fundamentals in the single-family rental sector that provide us with a strong macro tailwind to further expand our existing portfolio cash flows, execute on our strategic external growth plans and create value for our shareholders.” Staff Reporter Michael Aushenker can be reached at [email protected] or (818) 316-3123.