The Lease Up (Aug. 23-29): Mogul Mind Studios is Unstoppable in Pittsburgh
A Weekly Column of Major Corporate Expansions, Relocations and Lease Extensions
August 26, 2009
Editor's Note: Expansions Relocations & Extensions is now The Lease Up. Here you will find news on companies that are bucking the trend of the recession by expanding, or taking advantage of the market by relocating. You will also find stories on businesses that are weathering the storm through consolidations and renewals. Look to The Lease Up every week for valuable information that can be used as a source for business leads.
In this week's issue:
Mogul Mind Studios brings a major film project to Pittsburgh
Harley-Davidson begins scouting locations to replace its largest plant
BAE Systems relocates in Rockville, MD
Plus, we bring you news on: AGS, CBS, Clark County, The Economist Group, FDA, Foundation Radiology, Genentech, Ingram Yuzek Gainen Carroll & Bertolotti, LSI, Max International, North Central Tire, River Montessori, Room & Board, Temple-Inland and Triad Warehouse Solutions.
Mogul Mind Studios is Unstoppable in Pittsburgh
Although still regarded as the Steel City, Pittsburgh might soon become known as the next film and television production mecca.
Mogul Mind Studios has set up shop at an industrial park in Pittsburgh's Strip District, and has just landed its first major project - the $100 million action film Unstoppable, starring Denzel Washington and Chris Pine.
Mogul Mind Studios signed a long-term lease for a total of 330,000 square feet from 31st Street Business Park LLC, and is in the process of converting the space into a full-fledged film and television production facility. Although Mogul Mind actually took occupancy in December, the deal was finalized last month, according to Brian Kowalski of Complete Real Estate Solutions, who handled negotiations.
Six studios are planned for the facility, with sizes ranging from 7,500 square feet to 38,000 square feet. Company president and CEO John Yost has mentioned on several occasions that the Mogul Mind aims to create more than 1,200 jobs for the Pittsburgh region. Additionally, Mogul Mind plans to expand across Pennsylvania into the Philadelphia market.
20th Century Fox subleased about 90 percent of the space for Unstoppable, which is expected to wrap in 2010. The Tony Scott-directed film is estimated to generate about $60 million for Pittsburgh and create about 250 jobs. With a budget of $100 million, it is Pittsburgh's largest film project to date.
Unstoppable, a thriller about an engineer and a conductor trying to halt a runaway train filled with lethal materials, has seen its share of ups and downs over the summer. At one point last month, Washington was reportedly off the project, before committing to a new deal a week later.
Movies shot in Pennsylvania benefit from Act 55; Governor Edward G. Rendell's $75 million tax credit program intended to bring film projects to the state. Productions that spend 60 percent or more of their budget in the Keystone State are eligible for a 25 percent tax credit. Introduced in 2007, Act 55 created an estimated 4,355 jobs and generated about $20 million in new tax revenue in less than the first full year.
However, the tax credit could be eliminated completely, since Pennsylvania is currently deadlocked in a budget stalemate between the Democratic governor and House of Representatives and the Republican congress. "We're on day 57 without a budget," noted Dawn Keezer, director of the Pittsburgh Film Office (PFO).
Pittsburgh has seen steady business in the filmmaking industry since the PFO's inception in 1990. The organization has helped bring more than 90 film projects to the greater southwestern Pennsylvania region, and generated an economic impact of more than $360 million, according to its website. Some projects, like Unstoppable, have been quite a challenge for the PFO.
"We've worked on Unstoppable for five years in Pittsburgh," said Keezer. "I've lost track of how many production teams and directors, but I think this is the fourth iteration. They've looked all over the country, and all over the world." Most recently, Keezer noted, Michigan was being considered, due to a 42 percent tax credit. Fortunately for Pittsburgh, the Steel City was more suited to Tony Scott's vision for the film.
According to Keezer, Unstoppable, which begins filming next week, will soon be joined by two other high-profile film projects in Pittsburgh. Love and Other Drugs, starring Jake Gyllenhaal and Anne Hathaway, begins shooting at the end of September, and Next Three Days, starring Russell Crowe and directed by Paul Haggis, begins filming in October.
But if Pennsylvania lawmakers don't come to an agreement on the budget soon, ambitious projects like these could be taken elsewhere. Last week, filmmaker M. Night Shyamalan moved production of his supernatural thriller Devilfrom Philadelphia to Canada due to the budget impasse's potential effect on the film tax credit.
Harley-Davidson Scouting Locations for New Plant
Harley-Davidson is scouting sites in four states as it mulls a decision to move its York, PA, manufacturing facility -- the largest Harley plant in the country -- to the Midwest.
According to recent reports, officials from the Milwaukee-based motorcycle manufacturer have toured locations in Murfreesboro, TN; Shelbyville, IN; Shelbyville, KY; and Kansas City, MO.
In May, Harley-Davidson Motor Co. announced that it was considering closing its 1.5 million-square-foot York plant, which employs more than 2,300 people but has struggled to remain cost-effective, the company said. Harley Davidson’s second quarter net income dropped 91 percent from the previous year.
Should Harley-Davidson opt to relocate, Kansas City could be the most convenient option. The Motor Company already has a 330,000-square-foot plant in the city, which delivered in 1998 and sits on about 160 acres that it owns, although that plant has been affected recently by job cuts. According to Nathan Anderson, principal of Kansas-based Harbinger Property Group, Harley-Davidson would simply construct a new addition for the existing facility.
"I would assume that we have the advantage over the other markets we're competing with - but that's if they can get an incentive package that works," said Anderson. He elaborated by saying that the economic development team in Kansas City would likely offer a generous package to the motorcycle company, though it would probably be smaller than the other three potential locations, which do not already have a Harley-Davidson plant within their borders.
Yet, Pennsylvania officials are working behind the scenes to keep Harley-Davidson in the Commonwealth, an option the company said it would prefer.
Pennsylvania Governor Ed Rendell is drafting a $15 million incentive package to keep Harley Davidson in Pennsylvania, his office announced earlier this month.
"They're very pleased with what we've done and they've told us that, and what we've put on the table to help them in the expansion or renovation," Gov. Rendell said.
With incentives on the table, Harley-Davidson could be using the potential relocation to leverage its opportunities in negotiations with the Commonwealth, said a real estate source who requested to remain unnamed. "Otherwise, why would you retrain employees and go through the moving costs? It just doesn't make sense to me," he said.
BAE Systems Leases 140,000 SF in Rockville
By Jesse Ruscheinseky
BAE Systems, the defense and aerospace systems company, leased about 140,000 square feet at the new Redland Corporate Center complex in Rockville, MD.
The company will fully occupy 520 Gaither Road, a six-story, 139,120-square-foot office building that completed in June. It is relocating from 4115 Aspen Hill in Silver Spring, MD, which it has occupied since 1968. The relocation is tentatively planned for the first quarter of 2010.
Gene Sachs, Paul Ehrenreich, Lauren Hodgin and Kathryn Thomas of CresaPartners represented BAE Systems in the transaction. James Cahill, David Machlin and Lawrence Thau of CB Richard Ellis represented the landlord and developer, Perseus Realty.
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Expansions, Relocations & Extensions
Automated Graphic Systems (AGS), a provider of print and electronic media, leased 104,000 square feet of industrial space at 4560 Graphic Drive in White Plains, MD. Joseph Casey and Thomas Burns with Cushman & Wakefield represented AGS. The landlord, Demarr Investment LLC, was self-represented.
CBS Corp. signed a 10-year lease for 34,622 square feet at 1401 W. Cypress Creek Blvd. in Ft. Lauderdale, FL. The second-floor space will be occupied by CBS Interactive, the Internet division of CBS Corp., beginning in January. The two-story office building totals 76,703 square feet in the Crown Center business park. The owner, Midgard, completed a comprehensive renovation in March that added the building's second floor and positioned it for LEED Silver certification, which is pending. Ronald A. Schagrin of Commercial Property Group represented landlord in the lease. Jim Cahlin of Cushman & Wakefield represented the tenant. (By: Derrick Bogger)
Clark County signed a 10-year lease for the office building at 121 S. Martin Luther King Blvd. in Central North Las Vegas. The deal is valued at nearly $15 million. The single-story, 63,365-square-foot building was built in 1973. David Scherer, Barton Hyde, Michael Hsu and Matt Kreft with
Grubb & Ellis|Las Vegas represented the tenant. The landlord, M.L.K. Holdings LP, was self-represented.
The Economist Group, a publisher of business news and analysis, subleased 61,821 square feet at 750 Third Ave. in Manhattan through 2020. Occupancy is scheduled for the second quarter of next year. The 34-story, 779,641-square-foot office tower was constructed in 1958 in the Grand Central submarket. Richard Charkham and Michael Cohen of FirstService Williams represented the tenant. Jason Frazier, David Hollander and Gregory Tosko of CB Richard Ellis represented the sublandlord, Conde Nast. (By: Andrew Sears)
The Food & Drug Administration (FDA) has extended its 108,518-square-foot lease at 9200 Corporate Blvd. in Rockville, MD. The renewal with Piedmont Office Realty Trust, the building owner, is for five years. The four-story office building delivered in 1988 in the Shady Grove Executive Center. The FDA fully occupies the facility. Keith Foery, Jovi McAndrew and Guy Copperthite of Transwestern, along with Ken Mulrane of Piedmont Office Realty Trust, represented Piedmont in the lease. (By: Jesse Ruscheinseky)
Foundation Radiology signed a 9,799-square-foot expansion with Hertz Investment Group at Three Gateway Center in Pittsburgh's Central Business District. The locally based diagnostic imaging group is nearly tripling its space in the building, going from 5,268 square feet to 15,067 square feet. The 25-story, 370,175-square-foot office tower at 401 Liberty Ave. was built in 1952 as part of the Gateway Center Business Park. Laura Lee Bishop of Pennsylvania Commercial Real Estate Inc. represented the tenant. Gillian Franklin and Meagan Moore represented Hertz, in-house. (By: Leslie Kon)
Genentech, a leading biotechnology corporation, leased 75,000 square feet on four floors at 601 Gateway Blvd. Boston Properties owns and manages the South San Francisco building, known as Gateway Commons. The lease will commence in the first quarter of next year. Gateway Commons is a 12-story, 215,767-square-foot, Class A office property was built in 1984 on 7.24 acres. It was Energy Star rated in 2008 and 2009. Gregg Walker, Scott Miller and Sharon Chen of Jones Lang LaSalle represented the landlord. Tom Hayes of NAI BT Commercial represented Genentech. (By: Aaron Turkeltaub)
Ingram Yuzek Gainen Carroll & Bertolotti LLP signed a 19,854-square-foot lease at 250 Park Ave in New York. The law firm renewed for a 10-year term. The 21-story, 548,292-square-foot office tower was built in 1922 in Grand Central and received renovations in 1986. Gordon Ogden of Byrnam Wood LLC represented the tenant. David Hoffman Jr. and Robert Billingsley with Colliers ABR represented the landlord. (By: Christina McKinnon)
LSI, a lamination company specializing in security photo identification, leased 30,000 square feet at 2950 Brother Blvd. in Memphis, TN. The 231,330-square-foot manufacturing building was built in 1987 on 20 acres in the Northeast Industrial submarket. Gregg DeWitt of Grubb & Ellis Memphis represented the landlord, Top Rx Inc. Jack Wohrman, also of Grubb & Ellis Memphis, represented LSI. (By: Michelle Waiters)
Max International, a distributor of nutritional supplements, more than quadrupled its space in the Union Woods Building in Midvale, UT. The company signed a five-year lease for 19,000 square feet on the fifth and first floors. It previously occupied just 4,000 square feet. The six-story, 90,221-square-foot office building was constructed in 1985 on more than five acres in the Union Park Center. Scott Wilmarth, Aaron Jones and Daniel Herzog of CB Richard Ellis represented the landlord, Thompson Management and Development. David McCombs and Brent Haight of Commerce CRG represented Max International. (By: Autumn George)
North Central Tire leased 75,000 square feet for five years at Building A of Park West International at 2100-2140 Global Way in Hebron, KY. Delivered in 1996, the 330,000-square-foot, multitenant facility is in the Cincinnati International Airport Industrial submarket. Joshua Young of Cincinnati Commercial Realtors/Cushman & Wakefield represented the tenant. John Gartner, Kimberly Bertke and Erin Casey of Grubb & Ellis/West Shell Commercial represented the building owner, DCT Industrial Trust. (By: Linda du Pont)
River Montessori, a locally based charter school, leased 20,639 square feet of office space at 3880 Cypress Drive in Petaluma, CA. The tenant will use the space for school purposes, and not strictly as office space. River Montessori will be in the space for three years. The 35,792-square-foot office building was constructed in 1989 in Sonoma County. Trevor Buck, Steven Leonard and Matt Brown of NAI BT Commercial represented the landlord, LBA Realty. Ryan Snow and Jeff Negri, also of NAI BT Commercial, represented River Montessori. (By: Aaron Turkeltaub)
Room & Board, a home furnishings company, leased 70,223 square feet of new industrial space at 1390 Storm Parkway in Torrance, CA. Headquartered in Minnesota, Room & Board will open a new retail store in Culver City and will utilize the Torrance property as its distribution facility. Completed this year, the 70,223-square-foot industrial building was developed by Storm Industries Inc. The facility is part of the Storm Business Park. Courtney Bell and Matt Stringfellow of The Klabin Co. represented owner/developer Storm. Rooney Daschbach and Rusty Smith of Cushman & Wakefield represented the lessee. (By: Melissa Sicola)
Temple-Inland, the third-largest producer of corrugated packaging in North America, signed a five-year lease for the facility at 541 Industrial Drive in Lexington, SC. Move-in is slated for September. The 110,000-square-foot warehouse was constructed in 1969 on 15.5 acres. Rhodes Seeger represented the landlord, Blanchard and Calhoun, in-house. (By: Jeremy Adams)
Triad Warehouse Solutions, a logistics provider, leased the Silverlake Distribution Center IV in Charlotte, NC. The 106,065-square-foot warehouse building at 9348 D Ducks Lane was built in 1996 in the State Line Industrial submarket. Pete Pittroff and Brad Cherry with Keystone Partners represented the landlord, M. David Properties. Lester Osborn and Scott Hensley with Piedmont Properties represented the tenant.