Gym operator LA Fitness International has agreed to expand its headquarters with a 10-year lease at the Michelson office building in Irvine.
The Irvine fitness company will expand its offices about 30% with a move into 91,000 square feet at the Michelson, landlord Emmes Realty Services of California said.
LA Fitness was founded in 1984 and has grown to be one of the country's largest fitness club chains. In December, the company took over 171 Bally Total Fitness locations in 16 states, including about 40 in Southern California, marking one of the biggest deals by a gym chain in recent years.
With the $153-million purchase, LA Fitness had more than 500 locations nationwide. In 2010, LA Fitness generated around $1 billion in revenue, according to estimates by Club Industry.
Financial terms of the LA Fitness lease were not released, but real estate broker Jeff Ingham of Jones Lang LaSalle, who was not involved in the deal, estimated its value at more than $27 million.
The agreement with LA Fitness brings the Michelson at 3161 Michelson Drive to 93% leased, said Richard A.C. Coles, managing principal at Emmes. The 19-story tower was completed in 2007, just before the real estate downturn, and was nearly 40% vacant when Emmes acquired it in 2009.
The building was developed byMaguire Properties Inc., now known as MPG Office Trust Inc., to be the headquarters for lender New Century Mortgage Corp. New Century went bankrupt in 2007 and never moved in.
Other tenants in the building include auto lender Hyundai Capital America and law firms Gibson Dunn, Bryan Cave and Greenberg Traurig.
Energy cells help power Century City skyscraper
Century City skyscraper Constellation Place, formerly known as MGM Tower, is the first Los Angeles high-rise to be served by electricity-generating fuel cells.
Landlord JMB Realty installed two Bloom Energy Servers that will produce 400 kilowatts of power, about one third of the electricity needed by the 35-story tower.
Bloom servers, made by Bloom Energy of Sunnyvale, Calif., are each big enough to occupy an average parking space and contain thousands of Bloom fuel cells — flat, solid ceramic squares made from a sand-like powder — that convert air and fuel into electricity through an electrochemical process.
The fuel cells reduce the nearly 800,000-square-foot building's emissions from power generation 30%, JMB said.
"These servers, combined with the existing photovoltaic system, enable JMB to offer its tenants a greener office environment while generating significant savings," Sarah Shaw of JMB said.
JMB has about 2 acres of solar power arrays in Century City on the roofs of two parking structures it owns. The photovoltaic systems were installed in 2008 and 2010.
Tenants in Constellation Place include talent agency International Creative Management Inc., airliner lessor International Lease Finance Corp. and investment bank Houlihan Lokey.
Hong Kong tops list of most expensive office rents
Asia — most notably Beijing — is experiencing a boom in office rents fueled by rising demand and increasingly limited supply, a real estate brokerage said.
Rents for prime office space in Beijing rose 75% last year to $130 a square foot per year, the highest increase of any city in the world during 2011, according to Cushman & Wakefield.
Hong Kong remains the most expensive city for office space in terms of total occupancy costs at $244 a square foot, followed by London's West End at $239 a square foot and Tokyo at $197 a square foot.
The most expensive location in the United States was New York's Midtown neighborhood at $120 a square foot.
Globally, 2011 saw office demand improving, with availability falling and rents rising 3%. It was the second consecutive year of positive rental growth after a year of declining rents in all regions in 2009.
But the recovery remains restricted to prime office space and is most visible in major gateway cities, Cushman & Wakefield said.