Delays Finally Come to End for Burbank Office Development
Construction should finally begin this summer on an oft-delayed Burbank Media District office development.
The Ventura Freeway-front property near the NBC, Warner Bros. and Disney studios has traded hands for the fourth time in barely eight years. The 4.4-acre triangular site bounded by the freeway, California Street and Olive Avenue is now in the hands of Burbank’s biggest privately owned office landlord, Santa Monica-based M. David Paul Development.
The new owner took title last week after gaining Burbank City Council approval for its plan dubbed Media Center Gardens, two six-story office buildings totaling 585,000 square feet and expected to cost about $130 million.
Some of the parties making up the site’s previous development team battled in court over the need to sign tenants before beginning full-scale construction. But M. David Paul principal Jeff Worthe said his company won’t try to lease offices existing only on paper.
“People want to see steel; they want a real commitment,” Worthe said. “So we’re going 100% full-bore ahead.”
First to rise will be a 350,000-square-foot building designed by Dave Thomsen Enterprises, which will take most of two years to complete.
Back in the late 1980s and early 1990s, a team headed by commercial property broker John Cushman pursued plans for two office towers at the site, to be called NBC Plaza. The proposal collapsed during the recession and the property ended up in the hands of an affiliate of Cushman’s lender, the Bank of New York.
As the economy improved, the bank sought a buyer. It selected a group headed by Los Angeles developer Jerry Snyder, which retained an option to purchase the property as it sought approvals for a new campus-style office and retail development.
Snyder’s group worked out a deal with Boston’s Beacon Properties--then a publicly traded real estate investment trust--to develop and manage the property for Beacon, which would become the owner.
But about the time Beacon took title to the property (in late 1997) and Snyder hosted a high-profile groundbreaking ceremony (the following January), Chicago billionaire Sam Zell’s Equity Office Properties Trust REIT purchased the entire Beacon operation.
Snyder and Equity Office disagreed on the course of construction and fought in court after the latter opted to sell the property. That litigation has been resolved, allowing last week’s sale to proceed.
Cushman’s company, downtown Los Angeles-based Cushman Realty Corp., continues to earn fees on the property. Cushman Realty vice president Carl Muhlstein helped sell the site on behalf of Equity Office and has been retained by M. David Paul to negotiate tenant leases.
Little high-quality office space is available anywhere in Burbank, and the Media District market is particularly tight and expensive. Rents at top Media District buildings average around $33 per square foot per year, according to veteran broker Bill Boyd of Grubb & Ellis Co.
Worthe said M. David Paul is anticipating rents of just under $35 per square foot at Media Center Gardens, the first building to be constructed, which should open in mid-2002.
