COMMERCIAL
LA Fitness Inc., the Irvine-based health club chain, took advantage of the subprime industry’s collapse about four years ago when it landed a below-market sublease of office space near John Wayne Airport.
Now the privately held company’s taking advantage of tough times for area office landlords to get itself another strong deal.
LA Fitness recently signed a 60,000-square-foot lease renewal for its office space at 2600 Michelson, the 16-story office just off Jamboree Road that’s served as its headquarters for about three years. The lease runs for five years.
The 310,000-square-foot office building was owned and operated by Los Angeles-based Maguire Properties Inc.—now known as MPG Office Trust Inc.—but was placed into receivership in November. Santa Ana-based Grubb & Ellis Co. is running the property and heading up leasing while it’s in receivership.
LA Fitness moved from the Irvine Spectrum into the building in mid-2007, taking over three floors in a sublease of space from Orange-based ACC Capital Holdings Corp., parent of defunct subprime lender Ameriquest Mortgage Co. That sublease ran through the end of 2010.
Oliver Fleener and Tim Joyce, brokers with the Newport Beach office of Grubb & Ellis, represented the receiver in the lease. Terms of the deal weren’t disclosed. CoStar Group Inc. lists monthly rents of $2.10 per square foot at the building, which is about 50% full.
When LA Fitness first moved to the building, monthly rents were listed at about $3.25 per square foot, although Ameriquest’s sublease space was being offered at about $2.10 per square foot.
The lease renewal from LA Fitness “is a strong testament to the financial security of the asset” now that it is under court-supervised receivership, Fleener said in a statement.
Talonvest Flies
Two former executives with Newport Beach-based real estate investment management firm Buchanan Street Partners are starting up their own venture.
Talonvest Capital Inc., a Costa Mesa-based real estate investment firm, recently was started by Thomas Sherlock and Eric Snyder.
The founders are raising money to make loans and buy assets and notes valued at less than $10 million. They’ll initially concentrate on self-storage and multitenant industrial properties in the West, according to Sherlock, a former senior managing partner at Buchanan Street.
Snyder was a senior vice president and acquisitions officer at Buchanan Street and dealt with equity and structured finance assignments for the company.
Talonvest also plans to offer structured finance and mortgage banking services on larger commercial properties across the county, according to Sherlock, who last year served as the president for the Southern California chapter of commercial real estate group NAIOP.
Von Karman Give-Back
Another Irvine office built by the landlord formerly known as Maguire Properties has changed hands.
MPG Office Trust said in late May that it has turned over 17885 Von Karman Ave., a 151,370-square-foot building it built in 2007 to its lender, pursuant to a deed-in-lieu transaction.
The transfer of ownership to the lender ends a $26.4 million construction loan secured to the property, as well as a $6.7 million repayment guaranty, according to MPG Office officials. MPG paid about $2 million as part of the deal.
The construction loan was set to mature at the end of June.
A move by the landlord had been expected. Maguire officials said earlier this year that they were in “active discussions” with its lender regarding the five-story office, which was built on the former Washington Mutual campus.
Alternatives at the time were said to include a short-term extension on the loan and marketing the 40% full building for sale.
Management for the rest of the 16-acre former Washington Mutual campus, now known as Quintana, is overseen by a special servicer after Maguire went into default on those loans last year.
The 17885 Von Karman Ave. building is at the corner of Von Karman and Main Street, a few blocks from John Wayne Airport.
The building signed its first tenant earlier this year—Pasadena-based engineering and consulting company Tetra Tech Inc.—which is leasing 57,300 square feet at the building.
Like the existing Quintana buildings, which saw declining occupancy as Washington Mutual Inc. (and later JPMorgan Chase & Co.) cut back local operations, the Von Karman building struggled to get tenant interest upon its completion.
JPMorgan Chase announced earlier this year it would be moving local operations from Quintana to another complex in Irvine.
