In a deal believed to be worth about $30 million, a law firm has agreed to keep its offices in Century City's SunAmerica Center for another 10 years.
Kaye Scholer Fierman Hays & Handler initially leased about 80,000 square feet but ended up subleasing some of that to other tenants, said broker Gary Weiss. Weiss and Jeff Lasky of Julien J. Studley Inc. negotiated the lease renewal for the law firm, which is headquartered in New York.
SunAmerica Center's landlord has also expanded the offices of aircraft leasing firm International Lease Finance Corp., which will stay at the 39-story, 775,000-square-foot building for at least another five years.
Kaye Scholer and ILFC were among the first tenants when the building at 1999 Avenue of the Stars opened in 1990. It has some of the highest lease rates of any tower in Southern California.
Kaye Scholer will continue to occupy about 50,000 square feet on floors 16 through 18, said Weiss, who recently left Studley to join DLJ Realty Services.
ILFC, which occupies SunAmerica Center's top floor, has agreed to expand to parts of the 29th and 30th as well, said Mark McCaslin of McCaslin Co., which handles leasing at the tower on behalf of its owner, an affiliate of JMB Realty Corp. of Chicago
ILFC is taking over space occupied by Wasserstein Perella & Co., which will move to the 28th floor, and Bain & Co. ILFC will expand from the top floor's 30,680 square feet to a total of 53,621. John McRoskey of CB Richard Ellis represented ILFC.
McCaslin said that SunAmerica Center, which is 99% leased, was unable to accommodate Bain's expansion needs. Bain is moving nearby to the 20th floor of 1901 Avenue of the Stars with a $10-million lease for 27,000 square feet. Landlord DivcoWest Group was represented by Jeff Pion and Dana Perel of CB Richard Ellis. The tenant was represented by Jim Travers of Travers Realty.
With the region's economy still booming and little new office space under construction on the Westside, Century City tenants are paying a premium as they sign new leases today. While the parties to the SunAmerica transactions declined to disclose specifics, top Century City space commands annual rents in the vicinity of $45 per square foot or more, typically with annual rate escalations of about 4%.
If JMB can get commitments from enough potential tenants and secure financing, the strong rental market could put the company in position to begin construction of Century City's next planned high-rise--a 38-story tower dubbed Constellation Place, about a block from SunAmerica Center.
While the ownership of SunAmerica Center hasn't changed, its mortgage financing just underwent a major recapitalization. The nation's biggest office-building owner and manager, Chicago-based Equity Office Properties Trust, purchased a portion of the debt for $72.4 million and took over management of the property. Lehman Bros. Holdings also arranged another $210 million in new debt.
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Real Estate Trends
Century City Office Net Absorption
Century City Office Vacancy Rates
Note: Net absorption reflects the gain in rented space. Vacancy rate is the total vacant square footage divided by total rentable square footage in all existing buildings. Sublet space is space rented by primary tenants that is vacant and available for sublease.
Source: CoStar Group Inc.