Glendale High-Rise Will Be Marketed With Its Sister Site

The institutional owner of one of Glendale’s top high-rise office towers has decided to capitalize on the entertainment industry’s expansion and strong investor interest by putting the property up for sale in a market where it may command as much as $80 million.

The owner of the 18-story Glendale City Center tower and adjacent development site is a pension fund advised by Los Angeles-based Westmark Realty Advisors. It will probably receive offers exceeding $200 per square foot for the property, said Martin Sawa, a first vice president with CB Commercial Real Estate Group, Westmark’s parent.

Sawa, Bill Boyd and other CB specialists are helping Westmark market the building and the site of a planned “sister” tower to a select group of prospective buyers, including real estate investment trusts, pension funds and others.

The first tower, which is 96% occupied, was completed in 1991 and is located at 101 N. Brand Blvd. It has about 335,000 square feet of offices and more than 50,000 square feet of retail space within its two-level arcade. The adjacent site at the southwest corner of Brand and Wilson Avenue is approved for a 22-story tower with 385,000 square feet of space; it needs final design review from the city.

The completed Glendale City Center tower’s biggest tenant is Walt Disney Co., which has 38% of the space, much of that taken up by Disney Stores administration employees.

Downtown Glendale has become one of the strongest office markets in Southern California, due in part to its proximity to the major entertainment companies in and around Burbank. Disney and Warner Bros. are both major tenants in Glendale high-rises.

Rents have been rising steadily as the vacancy rate in Glendale’s best-quality office buildings has fallen to 7%. Several development teams are pursuing major new projects, including a 24-story tower under construction.

Not only is tenant demand strong, “there’s plenty of investment capital out there” flowing into better L.A.-area office markets such as Burbank, Glendale, Pasadena and the Westside, Sawa noted.

But that wasn’t the case just a few years back. As local office markets faltered during the recession of the early 1990s, the original Glendale City Center development team considered scrapping plans for the second high-rise in favor of a retail pavilion. However, the developers opted to leave the office plan in place as the city’s high-rise market rebounded sharply.

Sawa declined to identify any of the prospective buyers the marketing team is contacting but did indicate that the team hopes to be reviewing bids in January and to close a sale by the end of the first quarter of 1998. He added that Westmark’s client would consider selling the existing tower and entitled development site separately.

Local real estate sources speculated that several active buyers that own or are planning developments in the area might be interested in Glendale City Center. They include growing REITs Spieker Properties Inc., Kilroy Realty Corp. and Arden Realty Inc., institutional advisors Douglas Emmett & Co. and William Wilson & Associates and others.