Arden Signs 1st Tenants for 2 New Westside Office Projects
Brentwood-based Arden Realty has landed its first tenants at two office projects it has under construction--Howard Hughes Center near Westchester, and Westwood Center, the former Monty’s building in Westwood.
Intellectual property law firm Fulwider Patton Lee & Utecht has agreed to move from Westwood to the top two floors at Arden’s 240,000-square-foot Hughes center, 6060 Center Drive, alongside the San Diego Freeway. The 10-story building is slated for completion in the spring.
Legal research specialist LRN the Legal Knowledge Co. will move from Century City to Westwood Center, a 21-story landmark that Arden is giving a $35-million renovation.
Fulwider Patton partner Jim Paul said the firm’s future home at Howard Hughes Center will reflect the way intellectual property law firms will be configured in the future. The traditional legal library will nearly be eliminated and the new office will be designed around legal assistants. The layout gives them immediate access to semiprivate rooms containing the extensive files for the patent and trademark work handled by the attorneys they assist.
Fulwider Patton’s lease of just under 50,000 square feet--more than 20% of the building’s office space--is valued at about $18 million. CB Richard Ellis negotiated the deal on behalf of Arden, a publicly traded real estate investment trust. Cushman & Wakefield represented Fulwider Patton.
LRN, Arden’s first tenant at Westwood Center, has leased 14,300 square feet on the seventh floor, the first floor of offices above six parking levels.
Eric Hasserjian, Arden’s regional leasing director, said he’s close to signing leases with several other tenants at Westwood Center, scheduled to reopen in December.
Broker Jeff Cowan of Julien J. Studley, who represented LRN along with colleague Doug Fine, said his client liked the “creative environment” available on Westwood Center’s spacious seventh floor.
Westside office broker David Thurman, principal at Concorde Real Estate, said he’s not surprised to see tenants commit to buildings months before they open. Unable to find enough contiguous office space at existing buildings, he said, fast-growing tech companies in particular have helped fill the Westside’s newest buildings quickly--and at rents well above those of five years ago.
“Internet businesses have changed the whole landscape,” Studley’s Cowan said.
Arden is one of the real estate companies that has benefited from the changes--although Wall Street hasn’t been kind to real estate investment trusts in recent months.
Local real estate investors Richard Ziman and Victor Coleman established Arden primarily as a buyer and operator of office buildings in Southern California’s suburban commercial districts. But they and other real estate entrepreneurs have determined that the hikes in rents and property values in recent years justify office construction in some of the high-demand markets. Hence, they see speculative development projects such as Howard Hughes Center and Westwood Center as worth the risk.
The Fulwider Patton lease “validates our strategy to develop,” Coleman said.
Despite continued solid earnings, however, Arden and other REITs and publicly traded commercial real estate companies across the country have typically seen share prices fall since an uptick in the late spring and early summer.
Arden’s prices are down about 14% over three months, nearly mirroring the 15% fall in the Dow Jones Real Estate Industry index. Arden’s stock closed up 13 cents to close at $20.63 per share Monday on the New York Stock Exchange.
