Office landlord Jeff Worthe is towering over the Burbank Media District these days.
That's the busy entertainment hub along the Ventura Freeway with hundreds of media firms surrounded by Universal,
Worthe's real estate firm in Santa Monica already owns or manages more than half the office space for rent around the media district, and now he's purchased Tower Burbank, the tallest building in Burbank at 32 stories. He figures he controls more than 70% of office space there.
"Burbank really is the media capital of the world when you consider few cities in the U.S. have even one major studio," Worthe said. "That draws a lot of people to that market who want to be in and around those big studios."
A landlord in Burbank since 1984 with partner M. David Paul, Worthe Real Estate Group has built nine office buildings totaling more than 2.2 million square feet and bought five more buildings plus the former
Worthe Real Estate Group bought Tower Burbank for $109 million this week. Built in 1989 on West Alameda Avenue, it has a prominent position near the 134 Freeway next to another high-rise owned by Worthe Real Estate that is occupied by the Disney Channel.
Tower Burbank will get upgrades but will remain an office building, Worthe said. Though residential properties are in high demand in much of Southern California, the tower's viability as an apartment complex is uncertain and Worthe will stick with his company's specialty.
"High-rise residential isn't that prevalent in the valley, so it's tough to know how high rents could be," Worthe said. "We know it will work as office space."
It will work better with some upgrades targeted to appeal to people in the entertainment industry, he hopes. High on the list will be the addition of a health club open only to tenants of the building and a new cafe.
Another move will be to tear out the carpeted floors and dropped ceilings that were standard trappings of corporate office buildings in the 1980s but are now considered fusty to firms in creative fields such as entertainment.
Tower Burbank was the tallest concrete building west of the Mississippi when it was built, Worthe said, so he intends to make exposed concrete part of its charm. Offices will have polished-concrete floors and exposed-concrete ceilings.
Worthe will also change the lobby and the exterior "to a more current and creative feel," he said.
The former NBC lot where television shows
Worthe said he is in "deep discussions with multiple shows" to take over leasing
The media district is typically one of the tightest office markets in Los Angeles County, but with Tower Burbank empty, vacancy is well over 20% now, said Arty Maharajh, a researcher at real estate brokerage Cassidy Turley.
The purchase nevertheless gives Worthe "a lot of muscle" as the largest office landlord in Burbank, where asking rents have been declining since 2009.
"Buying this asset shores up his other investments," Maharajh said. "He can stop the slide of rents."
Worthe has also gained a competitive advantage by being able to offer potential tenants a variety of office space at different prices, Maharajh said. "He's not going to miss any tenant requirements in that market."
When Worthe thinks the Burbank market has tightened sufficiently, he will build more offices, he said. His company has tentative city approval to build nearly 2 million square feet in six buildings.
"The city of Burbank," he said, "is very supportive of business."