Tower Sells Despite Nestlé Exit

The 22-floor office tower at 800 N. Brand Blvd. presents an iconic – and in recent months problematic – landmark in downtown Glendale. Most famously, the 527,340-square-foot structure had been home to Nestlé USA since 1990, and with a lease that technically runs through April 2021, the Swiss-headquartered food giant continues to lease space there, despite having moved its 1,200-person workforce earlier this year to a new U.S. headquarters in Arlington, Virginia. As Nestlé USA began relocating its employees in waves, other longtime tenant Children’s Hospital Los Angeles absorbed some of the available square-footage. However, real estate brokerage CBRE Group Inc. has been struggling to find the right tenant to assume 12 contiguous floors remaining from Nestlé USA’s tenure. Despite the Nestlé exodus, last month Boston real estate investment firm Beacon Capital Partners purchased the property from Piedmont Office Realty Trust, a major REIT out of Atlanta, for a reported $160 million, or $303 per square foot, in a deal expected to close by the end of the year. Occupying 52,007 square feet on floors 17 and 18, Children’s Hospital remains an anchor tenant at the tower. Other tenants include Union Bank, Front Porch and Fact Retirement Service. ‘Transforming properties’ For Beacon, the purchase of 800 N. Brand Blvd. could change the building’s luck in leasing out its vacant floors. Moreover, the acquisition fattens the firm’s downtown Glendale portfolio — in October 2016, the REIT paid nearly $129 million to acquire nearby Glendale City Center, located at 101 N. Brand Blvd., from Legacy Partners. While it is too early for Beacon to announce its intentions for the asset, company spokesperson Maureen Richardson of River Communications said, “They are very excited to have acquired this great property. They’ve held a number of assets in the Glendale area, transforming properties and creating distinctive workplaces for their tenants.” Beacon once held but sold its properties at 400 N. Brand Blvd. in Glendale, 450 N. Brand Blvd. in Glendale, Trillium in Woodland Hills and the Tower in Burbank. Founded by Chairman and Chief Executive Alan Leventhal, Beacon is one of the largest REITs in the country, formed in 1998, after predecessor Beacon Properties merged with Equity Office Properties Trust. Beacon Capital Partners’ portfolio includes a diverse group of office towers and complexes nationwide, including Lafayette Center, Terrell Place and 2445 M Street in Washington, D.C.; 575 Fifth Ave. in New York City; John Hancock Tower Portfolio in Boston; 333 W. Wacker in Chicago; 201 California and 44 Montgomery in San Francisco; Met Park in Seattle; Offices at Gateway in Salt Lake City; and Civic Center Plaza, Wells Fargo Center and The Hub in Denver; Closer to home, in addition to the aforementioned Glendale properties, Beacon’s current holdings include 10 Universal City Plaza, a 35-floor, 813,892-square-foot Universal City tower that is 100-percent occupied by Comcast Corp.’s NBCUniversal; 1055 E. Colorado Blvd. in Pasadena, which, at five stories and 175,941 square feet, is currently home to 25 tenants, including Open Text, Hong Kong Airlines and Pasadena Water and Power; and the four-story 5161 Lankershim Blvd. in North Hollywood, a 197,174 square-foot structure that counts entertainment companies Endemol Shine North America and Bento Box Entertainment and advertising firm Aspect among its tenants.