Glendale Plaza Closer to Capacity
Developers of year-old Glendale Plaza moved closer to filling the 24-story high-rise with a lease of two floors to Great-West Life & Annuity Insurance Co. health-care insurance subsidiary One Health Plan.
One Health will move its regional administrative and network management operations into about 45,000 square feet of offices in the tower on Central Avenue in Glendale. Some of Great-West’s claims-payment and member-service functions will also move to the site.
The 10-year lease for the 19th and 20th floors is valued at about $14.2 million, which averages nearly $31.50 per square foot annually. The average rate that landlords in Glendale’s top buildings are asking today is $28.80, according to brokerage CB Richard Ellis.
Great-West spokeswoman Kathy Jacoby said the company has also retained an option to take additional space in the building, but declined to provide details. Local real estate sources predict the company will eventually lease two more floors.
As the first Southland high-rise office tower developed on a speculative basis (no tenants signed before construction) in nearly a decade, Glendale Plaza has been viewed as a barometer of the commercial real estate market in Burbank, Glendale and Pasadena.
The 530,000-square-foot building could be close to fully committed within just a few weeks, said Nyal Leslie, a principal in locally based PacTen Partners, which developed Glendale Plaza in partnership with the Morgan Stanley Real Estate Funds. Another new tenant is close to leasing two floors, and several existing tenants are discussing expansions, Leslie said.
While entertainment tenants haven’t taken as much space in Glendale Plaza and other nearby developments as sponsors had initially projected, more traditional tenants have stepped forward. One Health/Great-West will join Glendale Plaza anchor tenants State Compensation Insurance Fund and UnumProvident Corp.
“We are ahead of our [occupancy] projections without entertainment tenants and without any ‘dot-coms’ we need to worry about--and that’s just fine with us,” Leslie noted. “Many of the old-economy tenants are still growing and have great credit.”
Glendale’s office vacancy rate is 11.5%, compared with Pasadena’s 7% and Burbank’s ultra-tight 1.9%, according to CB Richard Ellis.
Doug Marlow and Nicole Wilson of CB Richard Ellis helped the PacTen team negotiate the deal, while Eric Beichler of Dallas-based Mohr Partners represented One Health/Great West.
