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Category ArchiveColliers International

Eikon Group Leases 20K SF in Former Lockheed-Martin Facility in Burbank

Eikon Group, a post-production company headquartered in London and known for its technical work on films such as Blade Runner 2049 and Spider Man: Homecoming, is relocating its Burbank, Calif. office.

Eikon signed a 10-plus-year lease for 20,000 square feet at 2777 North Ontario Street near the Hollywood-Burbank Airport for a total rent of $8.1 million, according Kyle Stanich, an associate vice president at Colliers International, who along with Nico Vilgiate represented EIKON and the property owner, SSV Properties, in the deal. While Stanich wouldn’t disclose the exact price per square foot, he said it is in line with market comps for the area, which range from $3 to $3.35 per square foot.

Currently located at 306 East Alameda Avenue in Burbank, Eikon is expected to make the move by September.

El Segundo, L.A.-based SSV Properties purchased the property, a former Lockheed-Martin facility, in 2007 for an undisclosed sum and recapitalized the property in 2015. SSV sunk $5 million of renovations into the 132,000-square-foot property to turn the former industrial building into a creative office space that appeals to an influx of media and entertainment clients in the Los Angeles market, David Jordon, CEO of SSVP told Commercial Observer, following the departure of two long-term tenants, Point 360 and Reliance Media. Property upgrades included repositioning the outdoor courtyard, entryway, lobby, elevator, bathrooms and building exterior, as well as updating the HVAC and building systems and installing skylights and operable windows. In addition, SSVP is working with Eikon, which will occupy space on the ground level, to remove part of the mezzanine to create a state-of-the-art theater.

“Everyone thinks Hollywood is the entertainment capital of the world, but in our opinion and as time has told, Burbank definitely is,” Stanich said. “There’s attractive business incentives that operate in Burbank. There are no gross receipts taxes so it’s cheaper to operate your business in Burbank than it is in Los Angeles or Culver City.” (A gross receipts tax is levied against the receipts of a sale that results in a change of ownership.)

Eikon is the first company to lease at the property since the property upgrades. Stanich, who said major studios and gaming companies have expressed interest in taking space in the building, anticipates that his company will lease the remaining space by the end of the year.

Eikon did not return calls for comment.

Source: commercial

Gary Barnett’s Extell Selling Off West 54th Street Site for Roughly $200M

Gary Barnett’s Extell Development Company is selling off a parcel on West 54th Street that is zoned for residential condominiums, Yoron Cohen of Colliers International, who is marketing the site, told Commercial Observer.

In particular, Cohen believes the 288,000-square-foot zoned site at 211 West 54th Street between Seventh Avenue and Broadway is prime for pied-a-terres in the 600- to 1,000-square-foot range, with an average price of $2,800 per square foot. There are “a lot of large units [in the area], but [you] don’t have a lot of pied-a-terre units,” he said.

“We think the highest and best use in this point of the market is residential,” the broker said. “It could be commercial if it was in huge demand.” And because the plot is “irregular,” meaning not rectangular, it lends itself better to “a residential scheme,” he noted.

Cohen said that there is no asking price, but he expects the site to sell in the ballpark of $200 million.

When Extell bought the site, it was bigger—more like 300,000 square feet— and was part of a big assemblage on the block. It had an address of 1710 Broadway and was going to be a commercial building. Those plans have been abandoned, Cohen said, because Barnett couldn’t convince all of the property owners to sell their sites. So “now he’s going to break it up and sell it piecemeal,” Cohen said. Extell is retaining some of the air rights at 211 West 54th Street to apply to its other sites, rendering the plot smaller.

Colliers gave it a street address, he said, as that’s “more applicable for a residential building.”

There is an empty building at the site, which a buyer would demolish. Colliers’ executive summary calls for a residential building with retail at the base and a few office floors, but at the end of the day the buyer can do what he or she wants.

Barnett didn’t immediately respond with a comment.

Cohen is marketing the site with colleagues Richard Baxter, Scott Latham, Jason Gold, Ameet Amin and Stephen Shapiro.

Source: commercial

Brookfield Properties Exec James Malone Joins Colliers International

James Malone, a well-known commercial real estate executive in Los Angeles, has joined Colliers International as a senior managing director overseeing the firm’s South Bay and West L.A. offices, according to an official announcement from Colliers.

A former vice president of leasing with developer Brookfield Properties (an operating entity of Brookfield Property Partners) and broker with JLL, Malone will partner with Colliers Executive Managing Director Hans Mumper to expand the firm’s presence in both pivotal Los Angeles markets. The appointment is part of the brokerage’s stated five-year goal to double the size of its business by 2020.

Malone’s deals include one of the largest lease transactions of 2017, when anchor tenant Bank of America extended and expanded its lease at its namesake plaza at 333 South Hope Street in Bunker Hill, growing within Brookfield Property Partners’ 55-story, 1.4-million-square-foot property to 218,000 feet from 164,000. Brookfield did not reply to a request for comment.

Malone, who earlier in his career was responsible for the marketing and leasing of mixed-use projects built by Catellus Development in both L.A. and San Francisco, also served as an attorney at the law firm Haight, Brown & Bonesteel in L.A., where he specialized in commercial litigation. He received law degree from Loyola Law School in L.A. following his graduation from UCLA with a bachelor’s degreein economics. After four years at Catellus, Malone worked at JLL for a 10-year period ending in 2013, according to this LinkedIn profile, and then moved to Brookfield from October 2013 until starting his new gig at Colliers this month.

In addition to his background in real estate and law, Malone formerly was in the National Football League, where he played briefly for the Tampa Bay Buccaneers and Cleveland Browns.

“There was no question in my mind that when James Malone, showed a strong interest in returning to the brokerage side of the business as a senior manager, someone who could partner with me in strengthening our efforts in our new West L.A. location and in the South Bay, there was no one else with his level of experience, or such a sterling reputation, in our pool of candidates,” Mumper told Commercial Observer. “He has everything it takes to succeed, including his work as a former top-producing broker for one of our major competitors, and even his experience as a practicing attorney. The fact that he attended UCLA, where he was a star linebacker for the Bruins’ football team for four years, may not immediately inure him to the many USC grads who work for us, but I think they’ll come around, too.”

Colliers greater Los Angeles presence includes its flagship office in Downtown Los Angeles, as well as offices in West Los Angeles, South Bay (El Segundo), Los Angeles North (Encino), Inland Empire (Ontario), Orange County (Irvine), Santa Clarita Valley (Valencia), and in the cities of Industry and Commerce with a total of 165 brokers, according to a company spokesman.

“The opportunity [at Colliers] fits with my long-term career goals,” Malone said. “My career was largely spent being a transaction person, executing deals. Colliers afforded me the opportunity to be in a leadership role in a global brokerage company.”

Malone, who lives in Manhattan Beach with his wife and two children, will oversee approximately 75 brokers in Colliers West Los Angeles office at 11911 San Vicente Boulevard and South Bay location at 2121 Rosecrans Avenue in El Segundo.

Source: commercial

LA’s First Coworking Space for the Cannabis Industry to open in Hollywood

Los Angeles’ first coworking space exclusively dedicated to startups and freelancers in the cannabis industry is set to open in Hollywood on July 1, according to an official release from Paragon, which bills itself as the “leading blockchain tech platform for the cannabis industry.”

The venture, Paragon Space, has leased 4,364 square feet at 1463 Tamarind Avenue, financed fully through Paragon’s cryptocurrency, PRG (ERC20 token). In addition to being the first cannabis-centered coworking space in L.A., Paragon bills the deal as one of the first all-crypto real estate deals of its kind. They raised approximately 550 Bitcoin and 8,100 Ethereum, according to Paragon.

As of Jan. 1, California joined several other states that have legalized the recreational use of marijuana. Nonetheless, traditional business services including, most notably, banking, have shied away from servicing the industry overall. Despite the fact that 29 states have legalized the possession and sale of marijuana for medical uses, and eight of those have approved cannabis for recreational purposes, federally regulated banks have refrained from handling industry funds given that the drug remains illegal under federal law, as the Los Angeles Times reported late last year.

The Hollywood space will include tiered amenities, with desks and offices only accessible to PRG currency holders—Paragon’s cryptocurrency, Paragon CEO Jessica VerSteeg told Commercial Observer. Members of the greater cannabis community will have access to public spaces, meeting rooms and a communal area that includes a café. (The café will also require PRG coin currency.)

The location was crowdsourced by PRG currency holders between August 15 and October 15, 2017, where community members used PRG Coin to vote. VerSteeg said her company has about 10,000 PRG holder/members.

Paragon plans to have various operational systems rolled out by April 20, including a coworking space application and reservation system. The team will also release its first version of the online seed-to-sale tracking system with mobile app. VerSteeg said the seed-to-sale tracking system is the main product of the platform that “allows full transparency, verifiability, and increased efficiency for business and consumers.”

Within the Paragon space, flex desks, lounging areas and offices will be available to rent. Members of the community will also have access to conference rooms to host their own events and meetings, according to an official company release. The cost of renting the space in PRG will be calculated based on the floor plan and its capacity, however Paragon said it expects the average price to rent to be much more affordable when compared to the wider Greater Los Angeles office market, which according to a fourth-quarter 2017 Colliers International market report, averaged $3.03 per square foot.

The lounge and outside area of the building will provide additional space for meetings and events as well as a communal area.

Baky Soumar of PITCH Concepts, a Chicago-based design firm with a focus on customized urban rooftop decks and backyards, is expected to lead design renovations aimed at transforming the building into a high-tech hub.

To further their mission, Paragon is also engaged in discussions with FUNDANNA, an online regulated crowdfunding platform for cannabis businesses where retail investors have the opportunity to invest in cannabis startups.

“FUNDANNA provides a great means of raising capital, while Paragon Spaces functions as a hub for building out new businesses,” said VerSteeg.

Source: commercial

Former SL Green Exec, Massey Mayoral Adviser David Amsterdam Lands at Colliers

Colliers International Group has found a new president for eastern-region investment and leasing in David Amsterdam, a veteran commercial real estate executive, formerly of SL Green Realty Corp., Colliers announced today.

The new role will put Amsterdam in charge of the company’s team in New York, Boston and Washington, D.C., leading the firm’s advisory business for clients including investors, corporate tenants and landlords.

“I am very excited to join Colliers and assume a leadership role in driving the company’s future growth … in New York City, the world’s most important real estate market,” Amsterdam said in a statement. “Colliers has demonstrated a commitment to hiring a world-class leadership team and I look forward to capitalizing on the many opportunities we see that will bring value to our clients and our professionals.”

Amsterdam, a graduate of Syracuse University, joined SL Green in 2011 from Cushman & Wakefield, but left the real estate investment trust in August 2016 to head the mayoral campaign of Paul Massey, the C&W executive who challenged Bill de Blasio in his 2017 reelection bid. After struggling to gain support, Massey dropped out of the race five months before election day, citing the high costs of campaigning against an established incumbent with a nascent national profile.

“[Amsterdam] is one of my favorite people in the industry, and has been for a long time,” Massey said. “He’s a tireless worker, and I think Colliers is lucky to have landed him.”

Dylan Taylor, Colliers’ COO, emphasized that Amsterdam’s hiring is part of a long play for preeminence in the northeast.

“We have known David for several years and are thrilled to have him spearheading our firm in these extremely competitive, important markets,” Taylor said in prepared remarks. “This strategic hire greatly strengthens our U.S. leadership team and further positions our platform as a leading global real estate services provider.”

Amsterdam—who worked as a Beverly Hills talent agent before beginning a career in the real estate industry—was not immediately available to comment further on his new position.

Source: commercial

Changes Afoot at Savills Studley 

There’s a bit of musical chairs going on at Savills Studley, Commercial Observer has learned.

Facing retirement within the next few months, John Pantazis has stepped down from his COO post at the firm and has become an executive vice president and director as the firm transitions to a new COO, Mitchell Steir, the chairman and CEO of Savills Studley, told CO. Savills Studley former CFO Al Petrillo has become the COO.

No new CFO has been named, but Vic Russo, who was the senior vice president of finance under Petrillo, has assumed his former boss’ duties, Steir said.

“These are just personnel changes that happen within a company,” Steir explained.

The firm has also promoted Patrick McGrath to a newly created position of CIO and head of client technologies. He was the head of cross-border transactions at Savills Studley, executing traditional commercial real estate transactions and developing best practices, technology solutions and analytic tools for companies with multi-national footprints, a company press release about the new position provided exclusively to CO indicates.

In a more sweeping measure, Savills Studley—which came out of the 2014 acquisition by international real estate adviser Savills of U.S.-based tenant representation firm Studley—has promoted 87 professionals throughout the United States in all service offerings. Of them, 39 were made vice chairman, 17 of them in New York City, a spokeswoman said. One broker speculated that this move was done to try and retain its talent. Steir said that he didn’t think a title would “lead anyone to stay some place they don’t want to stay.”

Steir said the 800-person company is always promoting people, and naming people vice chairman for the first time “in many ways was long overdue.”

He added: “The vice chairman promotions is because if you look around at our peer group you’ll notice that there are hundreds of vice chairman that are employed and we have had none. So, the fact that we haven’t had any has been the anomaly. “

On the West Coast, Savills Studley suffered a blow with the loss of a big retail investment sales broker.

At the end of January, power broker Bill Bauman, who co-headed Studley’s national retail services group in Los Angeles, left for Newmark Knight Frank, as The Real Deal reported. He took with him his four team members, including Kyle Miller, according to Mark Sullivan, the regional manager of Savills Studley in Southern California. (Bauman and Miller didn’t immediately respond to requests for comment.)

Sullivan explained the Bauman team, which specialized in retail investment sales, as such: “It was a self-contained, self-sufficient team who for the most part worked together, closed deals together [and] didn’t have a lot of interaction with other professionals in the company.”

The team has already been replaced.

“The hole we need to fill was [retail] investment sales and we have filled that hole,” Sullivan said. The five “replacement” agents hail from CBRE and Colliers International.

Source: commercial

Los Angeles Becomes a Mecca for Interactive Gaming and E-Sports

Interactive gaming is big business with an estimated 2.2 billion people who play video games worldwide. And Los Angeles reigns supreme, with many top game developers including Riot Games, Activision Blizzard, Electronic Arts and ESL Gaming headquartered here.

From the Westside to Burbank, Los Angeles currently leads the nation with 331 gaming companies operating in the metropolitan area and was second only to San Francisco when it came to being the largest employer in the industry segment (14,484 compared with the Bay area’s 16,466 employees across 307 companies, according to data from the Entertainment Software Association.)

JLL charted the locations of gaming companies—from Fortune 500 developers to related businesses—throughout town in a recent snapshot research report on the industry, dubbing the region a mecca for the sector.

Top dog Riot Games, owned by Tencent—which reported more than $12 billion in revenue in September 2017, according to Newzoo, a leading provider of market intelligence on global games and e-sports, or electronic sports—occupies 500,000 square feet of prime office space in West Los Angeles.

Furthermore, the interactive gaming industry’s impact on the office market in Los Angeles is poised to increase with the growing interest and investment in e-sports—multiplayer video game experiences and competitions in which players play against one another through a digital platform—which is driving additional demand for studio and creative office space, according to findings from a CBRE industry report released in December 2017.

Despite their sizable footprint, landlords have been skittish about entering into leases with gaming and e-sports businesses—which inspired the CBRE research report.

“Our clients and our brokers from several different offices around Los Angeles have seen some large tenants in the market looking for office space and a lot of these are new tenants to the market,” David Nusbaum, a senior research analyst at CBRE, told Commercial Observer. “They are venture-backed companies or privately funded e-sports companies that don’t have a long track record. The landlords’ concern was these tenants were new to the market. They didn’t have a credit history and a lot of these landlords were very hesitant to give high-end, Class A office space to [these] tenants.”

E-sports allow teams to compete in tournaments sanctioned by specific game developers. The field is evolving with the formation of leagues specific to popular games. Erase that outdated image of solitary players competing for bragging rights in their own domicile and enter major sports franchise owners and investors, broadcast rights and million-dollar arenas and studios being constructed to aid competitions.

Underscoring the trend, Blizzard Entertainment built out a 60,000-square-foot broadcast studio at 3000 West Alameda Avenue, at the site of the former Burbank Studios in Burbank last year for an undisclosed sum. Just this year, as the CBRE findings point out, two prominent North American leagues organized: Overwatch League and North American League of Legends Championship Series. Franchise fees range from $10 million to $20 million and owners and investors include Stan Kroenke, Robert Kraft, Peter Guber, Joe Lacob and other traditional sports team owners.

UC Irvine in Orange County opened the UCI Esports Arenaa 3,500-square-foot facility in 2016—the first of its kind at a public university—and actively recruited players with scholarships.  Major television and digital platforms have struck multi-million-dollar broadcasting deals. (For a sense of scale, West-L.A. based Riot Games, League of Legends’ developer, signed a seven-year, $300 million dollar deal last year with BAMTech, the streaming technology arm of Major League Baseball.) Heck, the 2024 Paris Olympic Committee is even considering adding e-sports to the Summer Games, according to ESPN.

Like other creative content providers that have expanded their business model and presence in the L.A. market—Amazon, Netflix and Hulu among them—gaming ventures are drawn to the area because of the talent base and concentration of entertainment studios and facilities, he said. “It goes along with everything else that you see in content creation and all sorts of digital media content that is being produced in Los Angeles,” Nusbaum said.

The gaming companies located in Los Angeles are not necessarily price sensitive, but are making business decisions in which they are prioritizing proximity to talent over real estate costs, Kevin Carroll, a research analyst at JLL, said.  This drive toward talent contributes to the high density of gaming companies in areas where tech and media employees are located on the Westside in Santa Monica, Culver City, Playa Vista and Venice, which consequently are some of the most expensive markets in Los Angeles. (Office rents in West L.A. averaged $4.61 per square foot at the end of 2017, according to research from Colliers International.)

Additionally, Downtown and Pasadena are also home to a cluster of gaming companies.  Gunslinger and WhiteMoon Dreams moved to Pasadena in 2016 and 2017 respectively, while Magnopus made the move Downtown in 2014, with Section Studios following a year later.

“This speaks to the demographic of those markets, and access to a young, educated work force. We continue to see a clustering of gaming companies around larger, more established tech firms as an effort to draft off of their success,” Carroll said.

And CBRE predicts the growth of e-sports will continue to fuel investments in the sector by game studios. Industry growth is also expected to spread into ancillary businesses including training facilities and broadcast studios and add to the demand for these hard-to-get commercial spaces in Los Angeles, especially in key markets, Nusbaum said. These include Burbank, which has become an epicenter of e-sports because of the Blizzard Arena, the suburban city of El Segundo and the West LA markets, including Culver City and Playa Vista.

“We are at the beginning of this industry. It’s an emerging trend and something our clients and brokers should be looking out for in 2018,” he said.

Source: commercial

Gatsby Enterprises Buys Harlem Commercial Building for $19.5M

Real estate investor Nader Ohebshalom’s Gatsby Enterprises has acquired a Harlem office and retail building at 75 West 125th Street from owner and sole tenant Carver Federal Savings Bank for nearly $19.5 million, Commercial Observer has learned.

Gatsby is paying just shy of $700 per square foot for the four-story, 27,933-square-foot property between Fifth and Lenox Avenues, which currently houses Carver Federal Savings Bank’s headquarters in its office portion and a bank branch in its ground-floor retail space. The two sides entered contract late last year and closed on the transaction on Feb. 22, according to sources with knowledge of the deal.

The bank is expected to vacate its offices at the building before the end of this year but maintain its retail presence on the ground floor by leasing back the space, sources said. The arrangement allows Gatsby to re-tenant the office space at higher rents while removing the risk of having to find a new street-level tenant in a challenging retail environment.

In addition, the Harlem property features unused development rights that take its total buildable square footage to around 70,500 square feet, the sources added—enabling Ohebshalom’s firm to potentially redevelop the site into a larger building in the future.

Gatsby was represented by broker Joshua Nazar of Venture Capital Properties, while a Colliers International team of Eric Yarbo, Christopher Turner and Sam Hamlin represented Carver.

Representatives for both Colliers and Venture Capital Properties confirmed the transaction but declined further comment. Neither Gatsby nor Carver Federal Savings Bank returned requests for comment.

Source: commercial

USA Arm of Spirits Giant Moving to Grace Building From San Fran

Campari America, the U.S. arm of the spirits company Campari Group, has signed a 10-year, 64,658-square-foot lease at Brookfield Property Partners and The Swig Company’s Grace Building to relocate its headquarters from San Francisco.  

The company, known for brands like Skyy Vodka and Wild Turkey, has been based in San Francisco since 1992. It will occupy the entire 18th and 19th floors in the 48-story building between West 42nd and West 43rd Street near Bryant Park when it moves in the fall, according to a news release from Brookfield.

The entire U.S. team, comprising 165 employees, is moving to the building, which has an official address of 1114 Avenue of the Americas.

Campari executives expect the new location will boost its connectivity with its other offices, as it puts the Grace Building office closer to its worldwide Milan headquarters, and operations in Kentucky, Jamaica, Mexico and Canada, according to Jean Jacques Dubau, the managing director of Campari Group’s business unit in North America.

“This move will help to increase collaboration with key business partners and our Milan counterparts; allow us to more easily hire candidates with deep spirits experience; and give us the room to expand as we grow our portfolio of premium brands,” Dubau said in a prepared statement.

Gensler has been selected to design the new Campari America office. Colliers International’s Joseph Cabrera, David Glassman, Tim Kuhn, Brendan Cavender and Steve Maneri handled the deal for Campari America. CBRE’s Ken Rapp, Sarah Pontius, Peter Turchin, Zak Snider and Cara Chayet represented Brookfield. Spokespersons for the brokerages did not immediately return requests for comment.

The asking rent in the deal was not immediately clear. However, in a recent Bank of America deal at the 1.6-million-square-foot tower, the starting rent was $70s per square foot, as Commercial Observer previously reported. And Humanscale, a designer and manufacturer of office products, signed a 33,000-square-foot lease to move its headquarters to the Grace Building. The asking rent in that deal was in the high-$80s per square foot, as CO reported last month.

Retail tenants in the building include Gabriel Kreuther, Bluestone Lane, Joe & the Juice, Sweetgreen and STK.

Source: commercial

Educational Daycare Opening Its First Manhattan Center in Tribeca

Childcare chain Kiddie Academy has inked a deal for a new outpost at 70-72 Reade Street in Tribeca.

A franchisee of the nationwide children’s education business leased 13,500 square feet for 15 years in the basement and on the lower level, ground floor and second floor of the condominium between Church Street and Broadway, according to a release from Colliers International. Colliers wouldn’t disclose the asking rents, but marketing materials from RKF peg the asking rents at $150 a square foot for the ground floor, $70 for the second floor and $30 a square foot for the lower level. The facility is set to open in early 2018.

Kiddie Academy, which has 180 franchised locations in 24 states, offers educational childcare for kids ranging from 6 weeks to 12 years old. The Tribeca outpost will be the first one in Manhattan, but there are franchised locations in Flushing, Whitestone and Williamsburg.

RKF’s Andrew Stern and Scott Zinovoy represented the owner, New Jersey-based office landlord ML7, in the transaction. Colliers’ Timothy G. Pond, Matthew Kuchar and Jordan Baruch represented Kiddie Academy.

ML7 is renovating both the residential and commercial condo portions of the building on Reade Street, according to the release.

Source: commercial