Suburban LA offices back on block

Real Estate Alert, April 28, 2004

Two area families are marketing a fully leased office/R&D park in suburban Los Angeles that has traded hands twice since 2000.

The asking price is $43 million for the 232,000-squarefoot Chatsworth Business Park, at 21415 and 21613 Plummer Street in Chatsworth. The buyer would have the option of assuming a $23.6 million mortgage, with a 7.69% rate, that matures in July 2011. Grubb & Ellis has the listing.

The Moers and Rosenfield families acquired the property in 2001 for $32 million from a joint venture between CT Realty of Newport Beach, Calif., and Cargill Financial Services of Minneapolis. That team had acquired the property a year earlier from Government of Singapore Investment for $12.5 million.

The main tenant, Los Angeles County, is leasing 165,000 sf through 2010 for its Department of Public Social Services. The agency pays a full-service rent of $13.56/sf that will rise at least 2.5% annually, depending on inflation. Sanyo North America, a subsidiary of Japanese electronics conglomerate Sanyo Electric, has a lease on the remaining 67,000 sf through 2007. Sanyo's triple-net rent of $6.60/sf jumps by at least 6.25% in October. Each tenant pays an annual tee for improvements and operating expenses. The leases each contain renewal options.

When CT and Cargill acquired the business park, it was only 29% occupied. They lured Los Angeles County as a tenant and undertook an $11.3 million renovation that included an expansion of parking capacity, to 708 vehicles.

The property, which was developed in 1986, is located about 30 miles northwest of downtown Los Angeles.