CoStar compiles news of corporate expansions, relocations, extensions, closures, layoffs, lease cancellations and mergers in the weekly Lease Up/Lease Down news report, a concise read keeping you updated on major corporate moves affecting commercial real estate, and can also be a valuable source for business leads.
In this week's issue:
KBR inks a 1.2 million-square-foot lease in Houston
Chrysler renews two leases at reduced rates
Boeing announces 1,000 Layoffs
Fontainebleau Las Vegas prepares to turn some leases over to Carl Icahn
Expansions & Relocations
KBR to Remain in Houston, Inks 1.2 Million-SF Deal
Last week, controversial defense contractor KBR signed the largest office deal in the United States in nearly two years, leasing a total of 1.2 million square feet in Houston.
Brookfield Properties extended the construction company's 700,000-square-foot headquarters lease at KBR Tower, as well as a 300,000-square-foot lease at 500 Jefferson St. KBR is also taking an additional 234,000 square feet in both office buildings.
The renewal annuls KBR's previously announced plans to relocate its headquarters to nearby Katy, TX, where the company had been planning a 910,000-square-foot campus. Those plans came to a standstill after the market took a tumble at the end of 2008, but the company maintained its intent on relocating to West Houston at a later time. Now, KBR has opted to stay downtown, its home for about 20 years.
"Expanding our downtown Houston presence is not only a good business decision, but also brings the added benefit of contributing to our City’s continued downtown revitalization," said Klaudia Brace, senior vice president of administration at KBR.
Both office towers are part of the four-building Cullen Center office complex in Houston's Central Business District. The 40-story KBR Tower at 601 Jefferson St. measures 1.05 million square feet and delivered in 1973. The 20-story, 390,500-square-foot high-rise at 500 Jefferson was built in 1962.
Dan Bellow and Mike Boehler with Jones Lang LaSalle represented KBR in the transaction. Paul Layne and Paul Frazier represented Brookfield, in-house.
"Successfully completing an office transaction of this size - involving a significant expansion - speaks to the increase in tenant activity we are beginning to see around our major markets," said Dennis Friedrich, president & CEO of Brookfield Properties' U.S. Commercial Operations.
OHL To Occupy 471,000 SF at Former La-Z-Boy Facility
By Jennifer Wilson
Ozburn-Hessey Logistics signed a 471,000-square-foot lease at 2203 Sherrill Drive in Statesville, NC, with plans to occupy the space this quarter.
The single-story, 639,000-square-foot, Class A industrial building was built in 1999, renovated in 2002 and is in the Iredell County Industrial submarket. It is the former La-Z-Boy distribution center.
According to Jeb Atkinson of Proventure who represented OHL, one of the features that attracted the tenant to this building was its clear height of 36 feet. This allowed the tenant to reduce its building footprint with higher racking capabilities.
Ted Haley of Lincoln Harris represented Lexington Realty Trust, the building's owner.
St. Jude Medical Leases 91,600 in Palisades West II
By Samantha Mrozinski
St. Jude Medical Inc., a medical device and tech developer, leased 91,569 square feet at 6300 Bee Caves Road in Austin.
Known as Palisades West II, the Class A, 156,872-square-foot office building was constructed in 2008. It is in the Southwest submarket and is currently seeking LEED certification.
Mike Brown of Cousins Properties Inc. represented the landlord, Palisades West LLC. John Childers of Jones Lang LaSalle represented the tenant.
Law Firm Signs for 76,000 SF at 77 Water St.
By Sean Glenn
Lewis Brisbois Bisgaard & Smith LLP signed a 75,716-square-foot sublease at 77 Water St. in New York. The Los Angeles-based law firm will occupy the 19th, 20th and 21st floors.
The 26-story, 612,237-square-foot office building was built in 1969, renovated in 2009, and is in the Financial District submarket.
The Cushman & Wakefield team of Louis D’Avanzo and Robert Constable represented the sublandlord, Goldman Sachs. Marc Shapses and Craig McKenna with Studley represented the law firm, along with Adam Foster of CBRE.
Arcadis Inks 71,430-SF Lease for U.S. HQ Space
By Laurie Forbes
Arcadis signed a deal that will keep its U.S. headquarters in the Denver area for another five years. The engineering and consulting company renewed 71,430 square feet at Highlands Ranch Office Center I in Highlands Ranch.
Investors Real Estate Trust acquired the two-story building from Opus Corp. in 2006 for $12.25 million or $171.50 per square foot. Arcadis fully occupies the 10-year-old, Class A property at 630 Plaza Drive.
Matt Anderson of Jones Lang LaSalle represented the tenant. Matt Smith of Vector Property Services represented IRET.
Major Law Firms Ink New Deals in Philly
By Tanika Belfield-Martin
Timothy Monahan, Patrick McGrath, Ken Clyman and Douglas Jamieson with Studley's Philadelphia office represented three major law firms in new lease deals.
Segal, McCambridge, Singer & Mahoney, Ltd. is moving from 30 S. 17th St. to 1818 Market St. The firm signed a 10-year lease to occupy 18,800 square feet on the 26th floor of the Class A, 981,743-square-foot office building. William Finnegan, Les Haggett, and James Mullarkey of Newmark Knight Frank Smith Mack represented the landlord in the deal.
Sweeney & Sheehan, which has been located at 1515 Market Street for over 31 years, is moving from a 19,000-square-foot space on the western side of the building to a 15,246-square-foot space on the east side. Michael Dolan of Stockton Real Estate Advisors represented the landlord in the transaction.
Chamberlain, Hrdlicka, White, Williams and Martin renewed and expanded from 6,000 square feet to 12,259 square feet on the fifth floor at the 300 Four Falls building in Conshohocken, PA. John Perkins of Grubb &Ellis represented the landlord.
American Truetzschler, a German manufacturer of textile machinery, signed a lease for 35,596 square feet in the industrial building at 1704 Poplar Drive in Greer, SC. The 35,596-square-foot manufacturing building was built in 1989 near Greenville-Spartanburg International Airport. Jonathan Good of NAI Earle Furman represented the landlord, Poplar Associates LLC. Glenn Batson, also of NAI Earle Furman, represented the tenant. (By: Kenicia Thomas)
The Block Institute, a Brooklyn nonprofit, signed a long-term lease for the 28,000-square-foot office building at 133 27th Ave. in Brooklyn, NY. The two-story building, built in 1966, is a few blocks away from the Block Institute's main office and is expected to accommodate 180 children and 65 staff members when it opens in the spring. William O'Brien of M.C. O'Brien Inc. represented the landlord in the transaction. (By: Ola Ayodeji)
Epsilon, a leading marketing services firm, signed a 22,000-square-foot expansion lease at 601 Edgewater Drive in Wakefield, MA. This will bring the company’s total square footage occupied to 135,000 square feet. The building is a Class A, 145,983-square-foot office property in the Lynnfield/Wakefield submarket. Mike O'Leary and John Boyle of FHO Partners represented the tenant. Chip Batchelder was the in-house representative for the landlord, Hobbs Brook Management. (By: Angela Scott)
Grooms Engines, a remanufacturer of engines, leased the entire facility at 1414 Fourth Ave. S. in Nashville. The 109,515-square-foot distribution building was built in 1950 in the IBD Industrial submarket. Mike Russell and Ben McKnight of Horrell Co. represented the tenant in the transaction. Matt Woodard and Jonathan Douillard of Chas. Hawkins Co. represented the landlord. (By: Jennifer Russell)
IO Plus Logistics leased 56,000 square feet at the Beacon Centre - Building 6 at 1850 N.W. 84th Ave. in Miami. The 97,830-square-foot warehouse building was constructed in 1989 in the Miami Airport West Industrial submarket. Hector Catano and Frank Trelles of WestVest Associates Inc. represented IO Plus Logistics. George Pino of Flagler Real Estate Services represented the landlord, AMB Property Corp. (By: Hilda Banegura)
Interline Brands, the national distributor of a wide range of maintenance, repair and operations product lines, signed a lease for 120,486 square feet at 1100 Lombard Road in Lombard, IL. Move-in is scheduled for this month. With the deal, the company tripled its operating capacity from its former 42,000-square-foot facility in Carol Stream to the 178,567-square-foot facility in Lombard. Britt Casey and Michael Hawryluk of Cushman & Wakefield, as well as John McDaniel of Mohr Partners, represented Interline Brands. CB Richard Ellis' Michael Sedjo, Chris Zubel and Patrick McCourt represented the landlord, AMB Property Corp. (By: Jonathan Dox)
The International School of Brooklyn signed a long-term lease for the 30,000-square-foot specialty building at 467 Court St. in Brooklyn, NY. Built in 1931 in Carroll Gardens, the three-story building was formerly the home to a Catholic school. It will be ready for student enrollment for the 2010-2011 academic year, which starts in September. William O'Brien of M.C. O’Brien brokered the deal on behalf of the landlord. (By: Ola Ayodeji)
LEO Pharma Inc. leased 12,654 square feet at 1 Sylvan Way in Parsippany NJ. The pharmaceutical company is relocating its U.S. headquarters. The 150,000-square-foot office building is situated on 23 acres within the Mack-Cali Business Campus. The facility features top of the line amenities including a full service cafeteria, conference center and covered parking. CB Richard Ellis' Senior Vice Presidents Carolyn Sica and Kurt Burdack represented the tenant, while Brian Decillis and Diane Chayes of Mack-Cali Realty Corp. represented the landlord, in-house. (By: Nicole Tanner)
Levy Phillips & Konisgsberg signed a 38,000-square-foot lease at 800 Third Ave. in New York. The personal injury law firm currently subleases the 13th floor, but will be moving down to the 11th & 12th floors this summer. The 40-story, 624,240-square-foot office tower was built in 1972 in the Plaza District. Other notable tenants include Kobre & Kim LLP and Kaufman Brothers L.P. Arthur Draznin and Ronnie Goldberger of Newmark Knight Frank represented Levy Phillips & Konigsberg. Richard Teichman and Richard Brickell of Joseph P. Day Realty Co. represented the landlord, in-house. (By: Sean Glenn)
MacCorkle Insurance Service leased 18,074 square feet at 577 Airport Road in Burlingame, CA. The full service insurance brokerage will relocate from 1650 Borel Place in San Mateo, and will occupy the entire fifth floor of the new building in July. The Airport Boulevard property is a Class A, 133,900-square-foot office building located near San Francisco International Airport, Highway 101 and interstates 380, 280 and 92. James Lees and Timothy Grant of CB Richard Ellis represented the landlord, The Blackstone Group, while Craig Kalinowski of Cornish & Carey Commercial ONCOR International represented MacCorkle. (By: Dan Bates)
The National Association of Letter Carriers signed an 88,423-square-foot, 10-year office lease renewal at 20547 Waverly Court in Ashburn, VA. The deal will commence on June 15. The 20547 Waverly location houses the association's health benefit plan administrative offices. The NALC has been the building's one and only tenant since its delivery in 1990. Caulley Deringer of Transwestern represented the tenant. Thomas Cicotello was the in-house representative for the owner, Clark Enterprises. (By: Walt Brown)
Navicure signed a 23,000-square-foot lease at Overlook at Sugarloaf in Duluth, GA. The internet-based medical claims clearinghouse firm chose the new location to meet the company's continual growth. The six-story, 140,000 square-foot office building at 2055 Sugarloaf Circle was built in 2000 in Atlanta's Northeast submarket. Rob Metcalf, Brannan Moss and Shannon Gordon of Jones Lang LaSalle secured the deal for Navicure. Greg Frankum of CB Richard Ellis represented the landlord, Wolbern Invest AG. (By: Rebecca Constantine)
Noise Barriers LLC, a manufacturer and installer of sound control systems, inked a deal for the entire 46,612-square-foot building at 2001 W. Kelley Court in Libertyville, IL. It will take occupancy in June. The property is in the Northwind Business Center in the South Lake County Industrial submarket. Constructed in 2001 with reinforced concrete, the 46,612-square foot building features 10 percent office build-out, multiple loading docks and drive-in doors, heavy power and 22-foot clear heights. Mark Deady with GVA Chicago represented the tenant. A CB Richard Ellis team including senior vice presidents Keith Puritz, SIOR and Brett Kroner, along with Ryan Bain, vice president, and Zach Graham represented the building owner, Aries Manufacturing Inc. (By: Justin Sumner)
Panasonic Digital Concepts Center signed a 50,322-square-foot lease for seven years at 10900 N. Tantau Ave. in Cupertino, CA. Built in 2009, the two-story, 102,360-square-foot, LEED-silver office building sits on 5.6 acres in the Cupertino Crossing business park. Panasonic is scheduled to take occupancy in May. Todd Shaffer, Mary Blaser and Patty McGuigan with Cornish & Carey represented the landlord, Tate Diversified Development. Nancy Morse with Grubb & Ellis in San Jose represented Panasonic. (By: Cat Henderson)
Toshiba Business Solutions leased 24,142 square feet at the Grand Oak Office V in Eagan, MN. The office equipment company signed for a four-year term. The 26,915-square-foot office building at 960 Blue Gentian Road was constructed in 1999 and is part of the Grand Oaks Business Park. The facility has 16,580 square feet of office space and 10,335 square feet of showroom space. John Colglazier, Jr. of Colglazier Properties represented the landlord. Toshiba was represented in house. (By: Michelle Getz)
Triennale Design Museum signed a 15-year, 18,067-square-foot lease at 40 W. 53rd St. in New York. The third location of this Milan-based museum is slated to open in May. The 30-story, 723,000-square-foot office tower was built in 1985 in the Plaza District. Additional tenants include Clifford Chance LLP, Financial Security Assurance and CBS. Michael Stone and David Tricarico of Cushman & Wakefield represented Triennale Design Museum. Arthur Bocchi with Paramount Group provided in-house representation for the landlord, along with the Cushman & Wakefield team of Gene Spiegelman, Michael O’Neill and Mark Lauzon. (By: Sean Glenn)
Yelp expanded to the top two floors of the 10-story building at 706 Mission in San Francisco, CA. The online social site already occupied floors three, seven and eight. This 20,000-square-foot expansion will put it in a total of 50,000 square feet in the building. Yelp has already taken occupancy of the new space that is leased for four years. The Mission Street property is 108,500-square-foot office building with top floor views of the Yerba Buena Gardens. There are plans of a mixed-use development for the building in the future. Tim Kazul and Jon Wittemyer of CBRE represented Yelp, while Jennifer Haeg and Gary Arabian of the CAC Group represented the landlords, JMA and Millennium Partners. (By: Dan Bates)
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Restructures & Renewals
Chrysler Extends St. Louis & Dallas Leases at a Discount
Chrysler has renewed a total of 447,000 square feet at two parts distribution facilities in St. Louis and Dallas. Originally set to expire in 2011 and 2012, both leases have been extended through the end 2016. The effective date was set to January 1, 2010.
Property owner Urstadt Biddle Properties (UBP) decreased Chrysler's rent for the St. Louis lease, dropping rates from $4.21 per square foot to $3.40 per square foot for the first years, and $3.90 for years six and seven. Located at 5790 Campus Parkway in Hazelwood, the 192,000-square-foot facility was built in 1968 and renovated in 1999.
For the Dallas lease, rent was dropped from $4.21 per square foot to $3.70 for the first five years. For the final two years, it would see a slight increase to $4.24, however. The 255,000-square-foot building is located at 2205 E. Beltline Road in Carrolton and was constructed in 1999.
"Given the recent turmoil in the United States automobile marketplace we are extremely pleased to have reached an agreement on the extension of these two leases with Chrysler Group LLC at competitive market rental rates," said Willing Biddle, president of UBP. However, he added that the Connecticut-based REIT views these two properties as non-core assets and is considering selling them off.
New York Life Renews 88,000-SF Lease at Graybar Bldg.
By Sean Glenn
New York Life Insurance Co. signed an 87,944-square-foot renewal with SL Green at 420 Lexington Ave. in Manhattan. The insurance provider will continue to occupy the entire 15th floor and a portion of the 14th on a 10-year lease.
The 31-story, 1.26 million-square-foot office tower, also known as the Greybar Building, was built in 1927. Located atop Grand Central Terminal, the historic building serves as the headquarters for SL Green. Additional tenants include Bank Leumi USA and Metro-North Commuter Railroad Co.
A. Mitti Liebersohn of Cushman & Wakefield represented New York Life. Steven Durels represented SL Green, in-house.
EF Johnston Technologies (EFJ) has restructured and renewed its lease for its corporate headquarters building at 1440 Corporate Drive in Irving, TX. The communications systems developer has extended the lease term from March 2016 to March 2019, in exchange for a $6,000 reduction in monthly payments for the period between May 1, 2009 and April 30, 2010. The landlord, Goldhaber Las Colinas LLC, has also agreed to release a $28,000 escrow amount to EFJ. EFJ occupies the entire two-story, 50,000-square foot flex building.
Kawneer Co., an aluminum building products manufacturer, renewed its 23,451-square-foot lease in at 19437 66th Ave. S. in Kent, WA. The 45,436-square-foot facility was constructed in 1981 and sits on almost two and a half acres. Features include drive-in and dock-high loading. Kawneer was represented by Brian Sapp of Fischer & Co. and Andrew Stark of Pacific Real Estate Partners. This transaction was negotiated directly with the landlord. (By: Kerry Post)
The NYC Department of Environmental Protection (DEP) signed a 21,567-square-foot renewal of its eighth floor lease at 1250-1258 Broadway in New York. The 39-story, 718,481-square-foot office building was built in 1968 in the Penn Plaza/Garment District. According to CoStar data, other major tenants include the Visiting Nurse Service of New York, Partners in Care and SAIC. A.J. Camhi and Eric Levy of Murray Hill Properties handled the deal in-house for the landlord. The DEP did not have representation. (By: Lauren Hale)
Squire, Sanders & Dempsey, a global law firm with 32 offices in 15 countries, recently signed an eight-year lease renewal for the 15,658-square-foot 21st floor at Tampa City Center. Located in the Tampa CBD, the 735,000-square-foot, Class A office building at 201 N. Franklin St. was built in 1981 and renovated in 1993. Robin Bishop, Jim Crews and Caleb Lewis of Bishop & Associates represented the owner, Mainstreet Capital Partners, in the transaction. Andy May and Barry Oaks of Cushman & Wakefield of Florida represented the law firm. (By: Melanie Lamb)
Williams, Benator & Libby, a CPA firm, signed a six-year renewal for its 11,850-square-foot space at 1040 Crown Pointe Parkway in Atlanta, GA. The 226,407-square-foot office building was constructed in 1985 and was purchased in 2004 alongside 1050 Crowne Pointe Parkway by Mass Mutual, according to CoStar Group data. The CPA firm occupies approximately half of the fourth floor. Ted Schwartz of Ackerman and Co. represented the tenant. Angela May of CB Richard Ellis represented the landlord. (By: Jeremy Adams)
Closures & Layoffs
Boeing Laying Off 1,000 Workers
Aerospace giant Boeing said last week that it is cutting about 1,000 jobs, primarily in its Engineering, Operations and Technology branch.
About half of the layoffs are to occur at Boeing's facilities in Puget Sound, WA, where the company does most of its airplane manufacturing. The remaining layoffs will occur in California (about 300), as well as various other locations across the country. The termination date is April 23.
Last year, Boeing announced plans to cut about 10,000 positions across the board. Although the company was unable to meet that goal in 2009, it estimates that it would be able to do so this year. Just last month, Boeing announced 134 layoffs in Puget Sound alone.
Boeing employs about 158,800 people worldwide.
Penn Traffic Shuts Down, Tops to Keep Most Stores Open
The Penn Traffic Co. said last week that it is closing all of its locations and laying off its employees. But the bankrupt supermarket operator also said that the majority of its 6,200-person staff would be retained by the company's new owner.
Tops Markets, which
purchased Penn Traffic at the end of last month for $85 million, intends to keep most of the company's 79 locations open. The stores operate under the P&C, Quality Markets and BiLo brands, and are primarily located in Central New York. According to a notice filed with the New York State Department of Labor, Penn Traffic employed a total of 4,142 employees in the state.
Tops did say however, that it would not be able to retain all of the former Penn Traffic stores. On Tuesday, the company announced that it would be shutting down four locations that are no longer competitive: two in Western Pennsylvania, one in Vermont, and one in New York.
Sears & Kmart Closing 21 Stores
Sears Holdings Corp. said Monday that it intends to close a total of 21 underperforming stores nationwide. The shutdowns equate to approximately 1,000 job cuts.
The department store owner is closing 13 Kmart stores and eight Sears locations, on or around May 9. Ohio is being hit the hardest, with five stores ceasing operations. Locations in Illinois, Indiana, Minnesota, Wisconsin, Colorado, Georgia, Florida and Washington are also being affected.
It the latest in a string of closures for Sears, which shuttered 27 stores just last quarter. In a letter to shareholders, Chairman Edward Lampert lamented the 2009 closures (a total of 62), but stressed that it was the only option after improvement efforts at those locations had failed to spur more business.
"With expiring leases, we have been able to reduce our money-losing stores while at the same time generating cash from the liquidation of inventory and the monetization of some of the stores that we closed," said Lampert. He added that the company is continuing to evaluate its 2,200-store portfolio and is implementing new strategies, avoiding closures wherever possible.
Also on Monday, Sears reported its fourth quarter earnings, which were the best it has seen in three years. Sears and Kmart earned $430 million in Q4 2009, up from $190 million a year earlier.
| Company | Address | Closure or Layoff | # Affected | Impact Date | | Boeing | Nationwide | layoff | 1,000 | 4/23/2010 | | The Penn Traffic Co. | Nationwide | closure (most employees will be retained) | 6,200 | immediately | | Sears | 230 N 18th Ave, West Bend, WI | closure | 71 | 5/9/2010 | | Kmart | 2500 Park Rd, Connersville, IN | closure | 59 | 5/17/2010-5/31/2010 | | Kmart | 876 SR 28, Milford, OH | closure | 46 | 4/6/2010-5/31/2010 | | Kmart | 33752 Vine St Eastlake, OH | closure | 72 | 4/6/2010-5/31/2010 | | Kmart | 180 Great Oaks Trl, Wadworth, OH | closure | 56 | 5/17/2010-5/31/2010 | | Kmart | 3250 W 65th St, Cleveland, OH | closure | 74 | 5/17/2010-5/31/2010 | | Kmart | 7611 Old Troy Pike, Dayton, OH | closure | 66 | 4/6/2010-5/31/2010 | | Kmart | 4210 Wheaton Way, Bremerton, WA | closure | 55 | 5/17/2010 | | Kmart | 6101 N Military Hwy, Norfolk, VA | layoff | 184 | 4/24/2010 | | River Hospital | 4 Fuller St, Alexandria Bay, NY | layoff | 44 | 5/22/2010 | | Liz Claiborne, Inc. | 1441 Broadway, New York, NY | layoff | 19 | 5/12/2010 | | Innovative Syracuse LLC | 1 General Motor Dr, Syracuse, NY | possible closure | 33 | unknown | | Pfizer, Inc. | 401 North Middletown Rd, Pearl River, NY | layoff | 72 | 5/21/2010 | | Innovative Companies LLC | 130 & 150 Motor Pky, Hauppauge, NY | closure | 120 | 5/21/2010 | | U.S. Pipe and Foundry Co. | 3000 30th Ave N, Birmingham, AL | closure | 244 | 3/5/2010 | | New Era Cap | 918 South Cedar Ave, Demopolis, AL | closure | 351 | 4/12/2010 | | Smurfit-Stone Container Corp. | 108 S Sycamore St, Jefferson, OH | closure | 130 | 4/10/2010 | | First Market Bank | 111 Virginia St, Richmond, VA | layoff | 26
| immediately | | Roto-Die Co. | 225 Jeb Stuart Hwy, Meadows of Dan, VA | layoff | 89 | 5/31/2010 | | TransCore | Clifton Forge, VA | layoff | 86
| 3/31/2010 | | Dal Global Services | Terminal C Lower Level, Philadelphia, PA | layoff | 385 | 3/15/2010 | | AGY Products, Inc. | 1200 Susquehanna Dr, Huntington, PA | layoff | 77 | 4/3/2010 | | Schoeneman Beauty Supply, Inc. | 396 Rte 61 N 201/222, Pottsville, PA | layoff | 57 | 4/7/2010 | | FCI USA LLC | 11823 Lenape Dr, Mt. Union, PA | layoff | 37 | 4/1/2010 | | Adelphoi Village | 354 Main St, Latrobe, PA | layoff | 70 | 4/9/2010 | | Zumiez, Inc. | 6300 Merrill Creek Pky, Everett, WA | closure | 172 | 4/23/2010 | | Coca Cola Enterprises | 9600 Burnet Rd, Austin, TX | layoff | 34 | 4/2/2010 | | Corvest, SPV | 8285 Bryan Dairy Rd, Largo, FL | layoff | 201 | 4/17/2010 | | Morgan Research Corp. | 12350 Research Pky, Orlando, FL | layoff | 88 | 3/31/2010 |
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Lease Cancellations
Fontainebleau Las Vegas has received more time to assume or reject three property leases, in connection with the
$150 million sale of its unfinished hotel and casino last week. According to case documents, the properties contained the bankrupt developer's offices, warehousing of materials, and models of its 7 million-square-foot resort. Fontainebleau sought to extend the deadline past February 15 because the sale had yet to close (it closed on February 18) and the buyer, noted investor Carl Icahn, plans assume two of the leases. The third lease, which is not being assumed, is receiving an extension through February 28.
Maguire Properties LP agreed to terminate its lease of 17,207 square feet of rentable area on the fourth floor at the 1733 Ocean Ave. in Santa Monica, CA. The building is owned by Robert F. Maguire III, the company's former chairman and CEO. The lease wasn't to expire until July 2016. Under the lease, the company paid annual rent totaling approximately $700,000, $800,000 and $1 million in 2007, 2008 and 2009, respectively. The company's future contractual lease obligations totaled approximately $8.5 million. Maguire Properties will pay a $2.5 million lease termination fee.
| Company | Address | Affected Parties | Comment | | Fontainebleau Las Vegas | 3131 Polaris Ave, Las Vegas, NV | Pepsi Bottling Co. | 69,433 SF, exp.2/28/2010 | | Fontainebleau Las Vegas | Las Vegas, NV | Javse Realty Corp. | exp. 2/25/2010, to be assumed by Icahn | | Fontainebleau Las Vegas | Las Vegas, NV | SMK, Inc. | exp. 2/25/2010, to be assumed by Icahn | | Maguire Properties | 1733 Ocean Ave, Santa Monica, CA | Robert F. Maguire | 17,207 SF, exp. 7/2016 |
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