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November 02, 2016  

PGIM Marketing Office Building in Glendale

PGIM Real Estate is teeing up a Glendale, Calif., office building — that city’s second big listing in the past month.

The 547,000-square-foot Glendale Plaza, at 655 North Central Avenue, is valued at about $175 million, or $320/sf. At that price, the buyer’s initial annual yield would be some 6%. CBRE is representing PGIM, a Prudential affiliate.

The occupancy rate is 95%. Animation giant DreamWorks is the largest tenant. The rent roll also includes Walt Disney Co.’s worldwide services division, Travelers Insurance and UNUM Provident.

The 24-story tower, the tallest office building in Glendale, was developed in 1999. PGIM acquired it in 2006, near the top of the last cycle, from J.P Morgan Asset Management for $214.4 million, or $402/sf. The property includes a restaurant and an attached garage. It has a landscaped courtyard and a LEED platinum designation.

A nearby office building recently went on the market. The 390,000-sf Glendale Center, at 611 North Brand Boulevard, is also 95% occupied. Special servicer LNR Partners listed the 14-story property with Eastdil Secured about a month ago. LNR, acting on behalf of bondholders, seized the property in 2012 after MPG Office of Los Angeles defaulted on a $125 million mortgage. The building was appraised in March at $91 million, or $233/sf, according to a servicer report.

Glendale, part of the so-called Tri-Cities market in North Central Los Angeles County, was among the Southern California cities hit hard by the economic downturn. But its recovery has been steady. The market’s average occupancy rate has risen for six consecutive quarters, to 88%.