A property that was placed up for sale earlier this year has recently traded hands. According to a report from The Real Deal, Kennedy Wilson sold the office property at 400 and 450 North Brand Blvd. in Glendale. The property was acquired by an El Monte-based entity linked to Ben Li for $60 million, or about $136 per square foot.
The recent sale marks an approximately 60 percent decline since the last time the property traded hands. According to a previous report from The Registry, the nearly 441,000 square foot asset last traded in 2017 for $144 million, or $326 per square foot.
That report also shows that the property was constructed between 1998 and 2000 and is home to an array of amenities, including an outdoor plaza, along with 76,790 square feet of retail space. Substantial investments exceeding $9 million since 2011 were directed towards enhancing common areas and mechanical systems, coupled with an additional $3.2 million allocated in 2016 for lobby repositioning and outdoor plaza enhancements. Positioned between the 134 Freeway and Glendale’s popular attractions like The Americana at Brand and Glendale Galleria, the office campus also offers convenient access to offsite amenities.
At the time the property was listed for sale, marketing information shows that the property was about 61 percent occupied. Current tenants include names such as Cigna, which has approximately 62,000 square feet, the California Nurses Association, co-working firm Regus and Learner’s Digest, though some leases are slated to expire next year, according to The Real Deal.
This sale signifies a notable shift in commercial real estate values, reflecting the evolving landscape of office properties and the challenges faced in retaining tenants amidst changing market dynamics.
According to a third quarter Los Angeles office market report from Newmark, office space in Greater Los Angeles continues to face challenges as vacancy rates in the third quarter hit 22.2 percent, while overall availability reached 27.6 percent. Sublet availability remained relatively unchanged at 5.2 percent this quarter. Occupiers are seeking top-tier spaces while downsizing their overall footprint. This shift is expected to increase vacancies in standard office spaces. Notably, nearly half of Greater Los Angeles’ office inventory operates below 80 percent occupancy, posing financial challenges as lower occupancy impacts generating positive income and supporting debt.
