Class A building sent back a grade
More than a year after it was completed, the gleaming and still empty Glendale office building known as 207 Goode has changed hands.
The Los Angeles-based property developer MPG Office Trust gave rights to the empty building back to the bank at a steep discount last month.
MPG received $22.8 million from the deal, $21.6 million of which was used to “partially repay” the $38.2 million construction loan on the 188,000-square-foot property, according to company documents. The lender, Banco Bilbao Vizcaya Argentaria of Spain, agreed to walk away without receiving the remaining $16.6 million.
“207 Goode was a property that was built at the high point of the market and completed at the low point of the market,” then-MPG Chief Executive Nelson Rising said in a Nov. 1 conference call with investors.
Rising has since resigned from MPG, a financially-strapped firm with a substantial portfolio of Southern California buildings, including four other towers in Glendale and the tallest building in the western United States, the U.S. Bank tower in Los Angeles.
Meanwhile, 207 Goode was acquired late last month for an undisclosed sum by Dallas-based Lincoln Property Co. Tanya Geary, who is managing 207 Goode for Lincoln, said the firm is actively seeking tenants.
“Right now we’re showing it and trying to lease it out,” Geary said. “We’re hoping to attract a big tenant to lease the majority of the building, instead of a bunch of little ones.”
Bill Boyd, a commercial real estate broker with Charles Dunn & Co. in Glendale, said the market for commercial real estate remains in the doldrums, but that the new owners have an advantage over MPG, formerly known as Maguire Properties.
“When Maguire owned it, they had to get office space rents that were $3.25 per square foot or greater to make the project work economically,” Boyd said. “It was an unenviable combination: 207 Goode cost too much to build for today’s market, and even if there was a potential tenant, they had to ask too much for it. The new owner’s base is far less.”
The asking price for top-quality office space in Glendale today is $2.69 per square foot, according to Grubb & Ellis Research Services.
In his call with investors, Rising briefly discussed MPG’s other buildings in Glendale, which include 700 N. Central Ave., 611 N. Brand Blvd., 701 N. Brand Blvd., and 801 N. Brand Blvd. He said they currently are profitable, but may be sold in years to come.
“We do not think the Glendale assets are part of our strategic long-term direction,” Rising said.
Current MPG executives did not return calls seeking comment.