Once-Quiet Glendale Is Humming With Developments by Entertainment and Other Industries

Glendale, an unpretentious town that didn’t put on airs and rarely got noticed by its big-city neighbors, has quietly emerged as an address of choice for the late 1990s.

The first post-recession skyscraper in Los Angeles County is being built there. KABC-TV Channel 7 just announced plans to leave Los Feliz and build a new studio there. DreamWorks SKG will open a new animation campus soon. A new shopping center is under construction downtown and two other centers are planned.

Much of this is occurring because Glendale has become a darling of the booming entertainment industry as it overflows from nearby Burbank. The city “has grown from a sleepy bedroom community to a thriving office center,” said Doug Marlow, a vice president in the Glendale office of CB Commercial Real Estate Group Inc.

Marlow is the listing agent for Glendale Plaza, a 24-story, 520,000-square-foot office building under construction on Central Avenue at the Ventura Freeway exit. Developer PacTen Partners had the confidence to break ground in August because local rents are climbing and construction costs are now lower than the cost of buying an existing building, said Nyal Leslie, chief executive of Glendale-based PacTen.

Only about 7.5% of Glendale’s 4.7 million square feet of office space is vacant, Marlow said. Developers generally believe it’s time to build new space when the vacancy rate drops below 10%, provided rents are high enough to justify new construction. Office rental rates have been climbing steadily in Glendale, and now range from about $27 to $29 per square foot per year--just a few dollars per square foot less than rents in Santa Monica and Century City.

The office space demand is highest for premium space, where the vacancy rate is about 5%, according to Seth Dudley, a senior vice president with Julien J. Studley Inc., who said the vacancy rate runs about 10% for second-tier space. Dudley said the shortage of premium space means Glendale Plaza’s developers will probably find ample tenants by the time their building, designed by Landau Partnership of Santa Monica, is completed in early 1999.

The entertainment industry’s push into Glendale also has created demand for industrial space, but not for traditional manufacturing uses. Barbara Emmons, a CB Commercial vice president, said Glendale is home to computer animation, special effects, set design and storage, editing services and a host of other activities by major studios as well as support firms that depend on Hollywood for their livelihoods.

Emmons said the vacancy rate has dropped to 1.6% in Glendale’s approximately 8.3 million square feet of industrial space. Demand is so high, and so little new space is available for development, that many prospective tenants must go elsewhere to set up shop.

One of the largest industrial sites is Grand Central Business Centre, a 100-acre industrial park near the interchange of the Golden State and Ventura freeways, which Walt Disney Co. bought earlier this year. Disney occupies about 60% of the approximately 2 million square feet at the center, which houses its Imagineering division, the unit that creates the company’s theme-park attractions.

Grand Central Business Centre also will be the site of a new television studio to be built by KABC-TV, said Arnold Kleiner, the TV station’s president and general manager. The station and its staff of 300, now occupying seven buildings at ABC’s lot on Prospect Avenue in Los Feliz, will move into the new studio in the fall of 2000.

Yet another sign of Hollywood’s appetite for growth is the new 330,000-square-foot DreamWorks animation facility. Jeanne Armstrong, director of development services for the city of Glendale, said the campus is slated to open in phases, starting in December, at a 12-acre site along the Los Angeles River known as Crystal Springs.

Demand for commercial space is just as strong in Glendale’s retail sector as it is in the office and industrial segments, according to Armstrong and Tim Genske, a CB Commercial vice president specializing in retail space.

“Glendale always has been a good retail market because it has strong, solid demographics and a good local economy,” Genske said.

The city’s redevelopment agency has focused on strengthening street-front business in the downtown core, where old-style retailers like Woolworth have moved out and been replaced by new stores like Zany Brainy, a children’s educational and multimedia toy store.

The Marketplace, a 170,000-square-foot “urban entertainment” project, is under construction downtown and will include four movie theaters as well as a second-story Linens ‘N Things store and a ground-floor WOW, a joint venture of Tower Records and Good Guys.

The second planned major project is the razing and reconstruction of Glendale Fashion Center, a once-successful outdoor mall that was built downtown in the 1950s but fell victim to changing retail tastes. Genske said the new 264,000-square-foot center will be built by Phoenix-based Vestar Development Co. Tenants who have already signed leases include Ralphs Grocery Co., Long’s Drug Store, a Barnes & Noble bookstore and Petco. Rick Kuhle, a Vestar senior vice president, said the company expects to begin the project in December and open the new mall in March 1999.

The third downtown project, tentatively called Town Center, is a 700,000-square-foot development south of Glendale Galleria that would include a two-acre city park and would be linked to the Galleria by pedestrian walkways, Armstrong said. The proposed project would include retail space along with hotel or office space. It is still in early planning stages.