Business Facilities -November 2008

COVER STORY being erected by New York developer Charles S. Cohen in West Hollywood. As one of the few alternatives on the west side, where it is part of the 14acre Pelli-designed Pacific Design Center, the twin-towered speculative project held great appeal to Fox and MySpace executives who preferred to stay in the area. But the 400,000square-foot planned project was priced more than $100 million higher than most of the other options that would receive consideration and was complicated by an obliquely-shaped footprint that, while making for a stylish addition to the landscape, would be fiendishly difficult to employ efficiently. For Fox’s intended use, the sharp-angled configuration would have required 15-20% more square footage for the same number of users than the more orthodox rectangular floorplates available at other complexes, Studley executives estimated. Other negatives included the owner’s insistence on a 20-year lease and the fact that construction was running several months behind schedule. Even the building’s sleek skin posed problems for attaining the environmental sustainability levels that were a requirement of the lease as part of News Corp.’s broader push to go green, said executive managing director Kelly Givens, who handles construction-related issues. Thus, despite lobbying by some key MySpace executives, it had to be ruled out. “It was inefficient and ludicrously expensive, and there was no way to solve our parking issue or to accommodate the expansion we needed,” said Capuciati. Another option with great geographic appeal was a six-building complex in the heart of Santa Monica known as Yahoo Center, whose eponymous major tenant has announced its 16 NOVEMBER 2008 Peter Capuciati, National Director Studley Corporate Services intention to exit, freeing up a block of more than 400,000 square feet of space. The owner of the complex, whose name will revert to Colorado Center once Yahoo leaves, is Equity Office Properties, whose acquisition by Blackstone had helped propel rents throughout the area on an upward spiral. The negotiation with EOP started out at a rent exceeding Lincoln Properties’ by several hundred million dollars, seemingly making it a non-starter. But as Studley got closer to its deal with Lincoln Property, things got more interesting around May when, at the eleventh hour, EOP “tried to steal the deal” with an unsolicited offer that slashed its request by more than $100 million, Capuciati recalled. Had it been accepted the offer would have given EOP a negative return, Capuciati surmises, but would have had the virtue of allowing the owner to unload a big block of space in a weakening market. But it was too little, too late, Studley execs said. Ultimately, the broker settled on the speculative office development being built by Lincoln Property and ASB Capital Management in an emerging mixed-use area adjacent to Marina del Rey dubbed Playa Vista that includes the site where Howard Hughes built his Spruce Goose airplane. (Hughes’ office still stands as a landmarked building.) The broader 1,000-acre Playa Vista complex is situated on what is being called LA’s Lower Westside, close to Los Angeles International Airport and the CA-90 and I-405 freeways, and two miles from the Pacific beach. At Playa Vista the residential development eventually will comprise some 5,000 units—primarily townhouses and condos—with a first phase of 3,600 primarily rental units already occupied. Nearly 16 acres of active park space will include volleyball courts, a skatepark, soccer and baseball fields and a bandshell, just the sort of amenities, as companies like Google have proved, that can help bind employees to a workplace where they’re expected to spend long hours. The Los Angeles Clippers basketball team also is building a training facility in the area. The area also seemed to be reaching critical mass on the commercial side, attracting the kinds of creatively focused companies that FIM would regard as peers. Game developer Electronic Arts had been the pioneer, relocating there in the wake of the dotcom implosion early in the decade, when it had its pick of locations in more established areas. At an adjacent development to Horizon called The Campus at Playa Vista, computer connectivity company Belkin International Inc. recently committed to 150,000 square feet for a relocation of its headquarters there in 2010. The Belkin commitment enabled the developer, Tishman Speyer Properties, to break ground on 325,000 square feet of on-spec space in the first phase of a project that’s eventually intended to encompass 1.2 million square feet. (As it happened, Studley had earlier approached Tish- PHOTO CREDIT: STUDELY, INC.

Table of Contents Feed for the Digital Edition of Business Facilities -November 2008

Business Facilities -November 2008 Contents First Word Sanpshots Corporate Moves: Utah Kodak Develops a Megasite in Upstate New York Anatomy of a Deal: Studley Finds a New Space for Myspace Metro Spotlight: Johnson City, TN A Renaissance of Growth in Medical Plastics The Lone Star State Flexes Its Muscles Asia: A Portrait of Growth Sky's the Limit for High-tech in Arizona Corporate Moves: Pennsylvania Ohio Leads the Way Alabama's Tide Rolls to the Future IEDC 2008 Award Winners Advertiser Index Introducing Navigator Livexchange

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