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Saturday, Apr 13, 2024

Aging Towers Get Facelift to Attract New Tenants

Two Glendale office buildings lost by MPG Office Trust Inc. are getting a major facelift now that they have been acquired by Blackstone Group L.P. out of foreclosure. The New York private equity firm plans to spend $61 million on the buildings at 801 N. Brand Blvd. and 700 N. Central Ave., which were bought in July for $69.8 million from lender LNR Property Corp. of Miami. Financing for the improvements is being provided by Starwood Property Trust Inc., a Greenwich, Conn. lender. The financing will help Blackstone upgrade the buildings from Class B+ or A- up to more attractive solid Class A properties, said Kyle Jeffers, senior west coast banker for Starwood. “(Blackstone) did this with another nearby property and were very effective in leasing it after the upgrades,” Jeffers said. “We liked the loan because we think they will be able to fill up the property.” Currently, the 13-story building on Brand Boulevard, built in 1986, is 66 percent occupied, while the eight-story building on Central Avenue, built in 1979, is 28 percent occupied. With the plentiful availability of Class A space in Glendale, older buildings need upgrades to attract tenants, Jeffers said. “They’re going to do a couple of million in upgrades to the lobbies and other common areas,” he said. Christopher Chee, managing director at Blackstone, said in a statement that Starwood offered a flexible loan that provided $48.5 million in initial proceeds, with an additional $12.5 million dispensed incrementally as tenants are found. It will pay for tenant improvements as well as cover leasing commissions. The properties were purchased in 2005 by MPG Office Trust, then known as Maguire Properties and still led by founder Robert Maguire. They were part of a 10-property portfolio that cost $1.5 billion. Burdened by debt, MPG Office Trust let the buildings go into special servicing as it has focused on retaining its core downtown Los Angeles portfolio, where it owns the U.S. Bank Tower and other trophy properties. Starwood’s purchase price included a parking garage adjacent to the buildings. Conejo Valley Winery While storefront wine tasting rooms have been popping up in shopping centers in recent years, Aldabella Custom Crush Winery & Storage LLC has decided to go industrial. The custom vintner completed its purchase of two suites at 31111 Via Colinas in Westlake Village in October. It snapped up the 14,065 square foot industrial property for $2.2 million. “In other tasting rooms, such as in Santa Barbara and Santa Ynez, that’s what you get – tasting. With this property, they’re able to do crushing, storage, and tastings or events all in one space,” said Gary Cohen, principal of Lee & Associates-L.A. North/Ventura office, who represented the vintner. Located across from the Four Seasons Hotel Westlake Village and near shopping areas and the Ventura (101) Freeway, the location is readily accessible to most of Aldabella’s clientele, said Larry Moisan, the winery’s president. “Really, the vision I had was something close to the Malibu area where a lot of our clients are. We also get clients from over the hill, as well as the Central Coast,” Moisan said. “Also, geographically, it’s great because we’re right across the street from the Four Seasons. With our event space, we’ll also be able to offer a great space for area companies looking to have events.” The company leased a temporary facility in Newbury Park while looking for its new location, and began the crush there in September. Moisan noted the Westlake Village location’s industrial zoning was attractive because it did not have any specific plan overlays, which means the company can manufacture alcohol on the site. It was able to finish this year’s crush in the new facility. Other construction and build-out will be completed over the next year, Moisan said, as the storage facilities and event space are designed. West Hills Expansion The West Valley office market saw some good news last month when Westwood Insurance Agency expanded its Fallbrook Avenue offices. The company, a subsidiary of QBE Financial Institution Risk Services Inc. of Atlanta, increased occupancy to 44,436 square feet from just 17,765 square feet. The company cited its employee base as a reason for remaining in West Hills. “QBE First is pleased to remain a part of the West Hills community as we continue to grow,” said CD Davies, chief executive of the company, in a prepared statement. Dan Sanchez and Gil Ohls of Jones Lang LaSalle Inc. represented QBE First. Staff reporter Kelly Goff can be reached at (818) 316-3135 or by email at [email protected].

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