hotels articles

WITH its Howard Hughes Center pulling in tenants at strong Westside rents, Arden Realty Inc. is picking up the pace of new construction to meet the demand.

And while builders pick up the pace, directors are probably dancing around the boardroom.

The real estate investment trust’s Howard Hughes Center, its first major foray into new development, has been on a roll since signing a deal last year for a 160,000-square-foot, build-to-suit for Univision Television Group.

Pre-leasing rates in the newest building at 6080 Center Drive are going for an average $3.40 per square foot per month. The 12-story building is 80 percent pre-leased and set to open in the spring, according to Arden.

Leasing has been so strong that Arden decided to break ground this month on a 286,000-square-foot building at 6100 Center Drive, nearly 18 months ahead of a timeline put in place two years ago. It also plans to break ground next month on a 160,000-square-foot spec building at 6040 Center Drive.

Company officials say leasing momentum is strong and note that J.H. Snyder Co.’s 250,000-square-foot retail component of the project is set to open early next year. Most tenants are of the Old Economy variety and were attracted by the project’s proximity to housing in the South Bay.

Strong leasing activity has also pushed up rents at the older 6701 Center Drive West (the Blue Shield building), where new leases are being signed at $3 a square foot, per month — up from $2 three years ago.

Tommy Hilfiger Corp. has vacated Rodeo Drive’s largest store, and the company is now faced with the daunting task of finding another tenant to take over its $1.5 million-per-year lease.

With consumers putting the brakes on shopping, some industry observers are viewing the 18,000-square-foot store as something of an albatross.

“It’s a tough number to sell,” said John Carroll, owner of Carroll & Co., a men’s store that occupied the Hilfiger site before the decades-old structure was torn down and rebuilt. “It’s too big for most specialty stores. Someone like The Gap could take it, but they aren’t going to pay the rent.”

While some real estate experts believe the, space will have to be broken up and rented out as two or three stores, others maintain that there are some high-end retailers eager to establish a large presence on one of the world’s most famous shopping routes.

Observers have seen designer Donna Karan checking out the store, which Hilfiger built in 1997 for around $20 million on a ground lease with property owner the Anderson Family Trust. Sources also said that Italian designer Roberto Cavalli has also expressed interest in the space.

Gilbert Dembo, the real estate broker hired to find a tenant for the gargantuan Hilfiger location, would not reveal who is checking out the trellis-laced store on the corner of Santa Monica Boulevard and Rodeo. But he did say there are a few contenders who may be ready to move.

“Right now we have several people looking at it,” he said. “They are people looking at the entire space…. I think we’ll have a commitment in the next 60 days.”

The general view is that any new occupant of the two-story structure would want to remodel the building’s white neoclassical exterior and redecorate the interior. “You won’t find any retailer that will keep the store in its current fashion,” said broker Matthew May of May Realty Advisors. “Anybody who is going to go into a store of that caliber will want to have their own presence and create their own identity.”

While Hilfiger is bowing out from the retail lineup on Rodeo Drive, several high-end newcomers, such as Brioni, Valentino, and Christian Dior, are getting ready to move into new stores.

IN the San Gabriel Valley, lease rates can only go up.

That’s the consensus after several large industrial deals in the third quarter consumed all the available space for larger users.

At Majestic Realty Co.’s Grand Crossing project in Industry, there were a spate of deals while Trammell Crow Co. remained in negotiation to lease its remaining property at the Irwindale Business Center.

That has left the Gateway Pointe project near Whittier, which is under construction, as the only project with space for larger users this year–but the initial buildings will not be ready until next month.

“The market has tightened up significantly,” said Phil Lombardo, a senior vice president at Trammell Crow Co. “It took a while but rents are starting to go up, and they are going to go up more.”

Industrial asking rents in the 169 million-square-foot market shot up to 48 cents per square foot on a triple net basis (not including taxes, insurance and maintenance) from 41 cents in the prior quarter, according to Grubb & Ellis Co.

Sales and leasing activity fell to 2.2 million square feet in the third quarter from a torrid pace of 2.9 million in the second quarter, when more space was available.

Still, more than 800,000 square feet of space was absorbed, and the vacancy rate fell three-tenths to 1.5 percent, the lowest in the county.

The quarter saw the continuation of large deals that started earlier this year, topped by the lease of 600,000 square feet by toy manufacturer Jakks Pacific Inc. at the Grand Crossing industrial park in the eastern reaches of Industry.

The toy company had been leasing smaller space across the street and moved as pan of an expansion, renting for seven years at 33 cents triple net for a total consideration of close to $17 million.

APL Logistics took 400,000 square feet at the park, also relocating from a smaller location in Industry as the growth in imports has continued to prompt companies to expand. The five-year deal was for 33 cents per square foot triple net for a total consideration of $8.5 million.

Standard Furniture Manufacturing Co., which makes mid-range furniture, relocated and expanded into 325,000 square feet at the park. It rented the space later in the quarter for five years at 41 cents triple net, reflecting the market’s tightening.

The three companies cornered the last available space at Grand Crossing this year. The project will total six million square feet when it is built out, but there will be no more space available until a 650.000-square-foot building is ready in September, nearly 12 months from now.

“It would be very, very nice now to have a building available,” said leasing agent Hank Darnell, a vice president at Majestic, noting that this is better than the situation several months ago, when weaker demand left 725,000 square feet vacant.

At the north end of the valley, Trammell Crow reported being close to signing a lease on the remaining 94,000 square feet at its Irwindale Business Center to an existing tenant that is expanding.

That leaves Gateway Pointe, being built by the Carpenters Pension Trust, as the only development in the San Gabriel Valley area with large space available.

The project, which will total 1.6 million square feet when built out, will have its first three buildings–at 613,000, 260,000 and 77,000 square feet–available in late November, said leasing agent Stu Milligan of Cushman & Wakefield Inc.

The project is being marketed at companies from the South Bay to the East San Gabriel Valley, with discussions under way with several potential users. Lease rates will be higher than at Grand Crossing.

In the San Gabriel Valley office market, the vacancy rate fell three-tenths of a point from the second quarter to i 1.7 percent. With little office product under construction, brokers expect the rate to fall further.

Major Events:

* Toy manufacturer Jakks Pacific Inc. leased 600,000 square feet at the Grand Crossing business park in Industry for seven years at 33 cents triple net.

* APL Logistics also secured 400,000 square feet at Grand Crossing, in a five-year-deal at 33 cents triple net.

* Also in Grand Crossing, Standard Furniture Manufacturing Co. expanded into 325,000 square feet, paying 41 cents per foot triple net for five years.

* Construction was under way on the first three buildings at the 1.6 million-square-foot Gateway Pointe near Whittier.

* The Trenton Corporate Center was sold to a Santa Barbara private investment group for $202 a square foot.

IMPENDING entertainment industry strikes, by screenwriters and actors cast a shadow over the Hollywood office market during the fourth quarter, as entertainment companies were sheepish in signing new leases until the matters are resolved.

“It is a delicate and cautious time for a lot of these companies. They are hesitant to make long-term commitments until they realize how this strike will affect their businesses,” said John Tronson, a principal at Ramsey-Shilling. “The demand won’t go away, but it will be herd in limbo.”

Fourth-quarter leasing activity in Hollywood was dominated by smaller deals, with construction of the major projects — TrizecHahn Corp.’s Hollywood & Highland and the Pacific Cinerama Dome project — both progressing nicely.

The CIM Group and Gilmore Associates both preleased restaurant space in the ground floors of major projects currently under construction.

The long-vacant former headquarters of Petersen Publishing was purchased and immediately put under renovation. Asset Management Consultants paid $4.5 million for the vacant 75,000-square-foot building at 6725 Sunset Blvd.

Several other office buildings were purchased during the fourth quarter and will be renovated.

AIDS Project Los Angeles finalized an $11 million deal to sell its headquarters building. The new owner, Accord Interests LLC, plans to more than double the size of the structure as part of its efforts to transform the nonprofit building into a moneymaking asset. Players in the local commercial real estate game expect the real action to come later this year, once several office projects are complete and Hollywood has finished grappling with the expected strike by actors and writers.

In the fourth quarter, the class-A office vacancy rate in Hollywood grew slightly from 15.3 percent in the third quarter to 15.9 percent in the fourth, said Paul Stockwell of Julien J. Studley Inc. However, the vacancy rate dropped in the class-B and C buildings from 13.1 percent to 11.6 percent, Stockwell said.

“There’s still a lot of activity, but not a lot of good class-A buildings yet,” Stockwell said. “It is positioned to explode this year.”

The fourth quarter was marked by the arrival of several new businesses.

San Francisco-based Amoeba Records, the nation’s largest seller of used albums and cassettes, bought a new 45,000-square-foot building at 6400 Sunset Blvd., at Cahuenga Boulevard. Originally intended for Freestyle Camera, Amoeba bought it for $10 million.

David Judaken, owner of the Garden of Eden nightclub, signed a 10-year lease for a 3,000-square-foot, ground-floor sushi restaurant dubbed “O.” The value of the lease is $1.2 million. The new restaurant is part of a CIM Group construction project under way at the corner of Cherokee Avenue and Hollywood Boulevard. The project includes 28,000 square feet of retail/restaurant space and will include a six-screen Laemmle Theaters multiplex on the second floor. The project is slated to be completed this spring.

CIM Group also leased two floors of its office building at 6922 Hollywood Blvd. to Creative Domain, an advertising and communications company. That deal involved Creative Domain taking 28,000 square feet. The building is the longtime home of the Bank of Hollywood, which occupies the ground floor. The building was named the TV Guide Hollywood Center last year after TV Guide leased 40,000 square feet on three floors.

Gilmore Associates has preleased the ground floor of its office building at 6253 Hollywood Blvd. to Richard Heyman Entertainment Venue Development. Heyman plans to open a restaurant called the Hollywood/Vine Diner and a nightclub called Ultra Lounge, both in that building. Gilmore Associates is currently doing a complete rehabilitation of the 12-floor, 120,000-square-foot building, which has been known as the Hollywood Equitable Building. It expects to finish that overhaul by this spring.

As for the sale of the AIDS Project Los Angeles headquarters building, new owner Accord Interests LLC plans to spend $30 million to add 180,000 square feet to the 120,000-square-foot building.

Tronson said there is great interest in the building from large entertainment industry tenants, possibly attracted by a previous job in which Accord Interests turned a group of beat-up warehouse buildings in Burbank into a new headquarters building for Nickelodeon.

The Hollywood building was previously owned by ABC Studios and was used as a broadcast studio facility. It includes eight studio spaces, six of which could be used for production purposes, Tronson said.

The renovation is expected to start soon. APLA officials are still in the process of moving employees to four new APLA facilities. The nonprofit decided to sell the building because it did not need so much space, Tronson said.

Elsewhere in Hollywood, Propaganda Films leased a 30,000-square-foot, 1950s’ style building at 1741 Ivar Ave. in a 10-year deal valued at $8 million. Propaganda’s former home at 940 Mansfield Ave. was leased earlier in 2000 to Fusient Media, which just bought the broadcast rights to World Wrestling Federation events.

The U.S. Customs Service has signed a $63 million lease deal with TrizecHahn Corp. to move its Los Angeles operation from Terminal Island to a Long Beach office tower.

About 350 employees of the Customs agency’s Los Angeles/Long Beach Area Port of Entry will move from the aging Terminal Island Office to the 383,000-square-foot Shoreline Square as a result of the deal, which was signed by the General Services Administration.

The transaction, one of the biggest Long Beach office leases in recent years, includes rent payments that increase at specified dates over the course of the lease term, along with funds slated for customizing the offices.

The Post’s Travel Section Flight Crew will take your comments, questions, suspicions, warnings, gripes, sad tales and happy endings springing from the world of… the world. Of course, the Flight Crew will be happy to answer your travel questions — but the best thing about this forum, we insist, is that it lets travelers exchange information with other travelers who’ve been there, done that or otherwise have insights, ideas and information to share. Different members of the Crew will rotate through the captain’s chair every week, but the one constant is you, our valued passengers.

The Post’s Travel Section Flight Crew will take your comments, questions, suspicions, warnings, gripes, sad tales and happy endings springing from the world of… the world. Of course, the Flight Crew will be happy to answer your travel questions — but the best thing about this forum, we insist, is that it lets travelers exchange information with other travelers who’ve been there, done that or otherwise have insights, ideas and information to share. Different members of the Crew will rotate through the captain’s chair every week, but the one constant is you, our valued passengers.

Re. Norway (last week): Union Station has their salute to Norway this holiday season, and during the day there is information available at their kiosk by the big Christmas tree.

Anne McDonough: Ah, hope the poster from last week is chiming in again today-thanks!

Also, I forgot to say what the winner of today’s chat question contest thingie will get: A travel toothbrush that comes with a special case that supposedly de-bacteriazes it, and a t-shirt and perhaps something else from the box o’junk.

_______________________

Gaithersburg, Md.: I asked this a couple of weeks ago. Is there a drinking age on cruise ships. We are cruising the Western Caribbean Dec. 24-29; my 17-year-old thinks he’ll be allowed to drink, drink, drink. What are the official rules, and do the ships enforce them? Thanks!

Cindy Loose: Each cruise line has its own rules. We wrote about this in coming and going, but I can’t remember which cruise line has which rule. I’m sure you can contact the cruise line you son is using to find out.

Those that have rules enforce them, although if your son is at all coniviving, he can probably find a way to get older friends to carry the drinks. If that’s his goal and you’re coming along, you will have to be vigilent even if the rules deny him. If you aren’t going, maybe he shouldn’t either.

_______________________

Northern Va: Hi Crew -

Thanks for the great chats. Here’s my question: My family is surprising my mom with a trip to Hawaii for her 60th birthday. Problem is, she gets very seasick on boats and somewhat motionsick in cars, and we’d like to drive the Road to Hana in Maui and do a cruise along the NaPali coast in Kauai. We’d like to avoid medications such as dramamine because she is on a number of medications already and we’re always worried about interactions between the different medicines. So, any suggestions for non-pharmaceutical remedies for seasickness and other motion sickness? I recently heard about accupressure bracelets, but don’t know if they really work. Thanks!

Anne McDonough: Let’s open this one up to the chatters–anyone have personal experience with non-pharmaceutical remedies for seasickness? We’re not endorsing any of these, by the way. Informational only. PSA over.

_______________________

Anonymous: I am planning a long term trip to the Caribbean. Have some places to stay nailed down, want to bounce around a little and island hop. Are there any specific rules I need to know? I have been researching open ended travel and long term stay, but wonder what you travel gurus can share with me! Thank you.

Gary Lee: Your question is very general so am not sure where to start. Having done a bit of island hopping, I did want to offer a couple of thoughts. Keep in mind that most islands are distinct countries that require you to go through customs, etc every time yoo come and go. Since drug smuggling is sometimes an issue, the local authorities can sometimes be more agressive with searches than you would think.

On the positive side, I have found that in most cases, you can find your best lodging options by just showing up and asking around.

_______________________

Nervous about Delta in Washington DC: I heard on the news a few days ago something like this: “Delta’s cockpit crews are meeting to authorize a strike.”

New York City entrepreneur Grace Gallo is three years away from turning 50, but she’s already emailing friends and family to save the date for a big birthday bash abroad. The location? A place unthinkable just five years ago: Dubai.

[ILLUSTRATION OMITTED]

She briefly considered Egypt but selected the bustling Middle Eastern outpost with its over-the-top hotels, restaurants and nightclubs for her early September celebration–even though she knows Dubai will be blaringly hot then. She’s planning to blow out her birthday candles at the $666-per-night Burj Al Arab Hotel, a sail-shaped landmark on the Arabian coast. It gets seven stars for its all-duplex suites, 24-hour butler service, rooftop helicopter pad, underwater bar and Rolls-Royce fleet.

“I managed to get 50 people to come to Vienna and stay at the Danieli [Hotel] for a Venetian ball on my 40th birthday, so I think I can do this,” says Gallo, an Italian-born, Australian native who runs export marketing consultancy Gallaco from an office in Rockefeller Center.

Dubai is inspiring more global-minded execs like Gallo, who has worked in China and traveled worldwide, to sample Arabia in this safe cosmopolitan oasis of more than 1.2 million people.

Business-class passengers arriving in Dubai after an overnight flight on Emirates Airways feel fairly refreshed, thanks to such comforts as self-adjusting, vibrating seats that recline to become bed hideaways, wireless in-flight email, personalized video on demand and French champagne. Met by a representative of Emirates, they are whisked through immigration courtesy of a no-fee visa instantly granted at the airport and escorted to a curbside Mercedes for a 10-minute ride into the city. Along the wide Sheikh Zayed Boulevard cutting north-south through the city, neon signs and gleaming skyscrapers set against a desert landscape remind one of Las Vegas.

[ILLUSTRATION OMITTED]

Though Arabic is the official language here, English is widely spoken and one could almost forget that one is in the Middle East if not for the large number of mosques in the city, the occasional palace and the traditional Arab clothing of the locals. First-time visitors quickly discover that Dubai’s shops and museums are closed on Thursdays and Fridays but reopen on Saturday morning, and that alcohol is not served in hotels during Islamic religious holidays and not in restaurants outside the hotels at any time.

Although a recent terrorist attack in nearby Bahrain gave pause to some international business travelers. Dubai has so far avoided the political conflicts of the Middle East. A small coastal village in the 1830s, but today one of seven making up the United Arab Emirates, Dubai is emerging as an “in” destination.

Nearby Doha and Qatar may vie for the title, but Dubai is becoming the region’s hub for business. Tourism is one of the growth engines and the number of hotel guests swelled in 2003 by 5 percent to 5 million, many of them Brits and Germans who came to soak up the bright sunshine at the numerous luxury resorts lining the shores of the Arabian Gulf. Travel from the U.S. is picking up, too, after a dip following the September 11 terrorist attacks; the number of U.S. visitors increased to 126,000 in 2003 from 94,000 the year before. Helping boost the numbers is a new, 12-hour direct flight from New York’s John F. Kennedy International Airport to Dubai by Emirates Airways with free stopovers and bargain hotel rates for passengers en route to Asia or Africa.

Attracted by strong economic growth, entrepreneurs have poured in from nearby countries. Some 80 percent of Dubai’s citizens hail from other regions of the world, many of them from India. Local Indian entrepreneur Kulwant Singh runs Lama Desert Tours & Cruises, the city’s first privately owned tour operator. Lama offers spine-tingling, jeep caravan rides into the desert, roller coaster riding over the dunes. His company’s all-teak traditional dhow or cabin cruiser takes visitors on dinner cruises along Dubai Creek for an overview of the city.

Grandiose, Dubai is. Ads proclaim nearly every hotel, restaurant, nightclub, show, shopping mall or real estate development as the largest, priciest or most luxurious of them all. One of the most popular resorts is referred to even by locals only by its full name, the One & Only Royal Mirage. Just north of the Mirage, on landfill in the shape of a palm tree, some 2,000 villas, hotels, shopping centers and cinemas are rising.

The project is already sold out and the developer, Nakheel, is planning two larger island developments–one with 300 raw islands in the shape of a globe. Investors can buy part or all of a “country,” and one investor wound up buying all the islands that make up the shape of Australia, according to Jacqui Josephson, a marketing exec for The Palm project. She says it’s up to investors to decide how to use the property–private island, golf resort, executive retreat or whatever.

Women & Wine[TM], Los Angeles, is creating a new niche in luxury travel, wine-themed itineraries for women. Its first trip in April was a two-day Santa Barbara jaunt. Customized itineraries include wine-growing regions from Napa Valley to Long Island and international destinations are also planned.

Art-savvy travelers in Europe can check into four hotels that prominently feature the works of a major artist. Called art’otels, the establishments are billed as art works and are named for and “signed” by the artists. Travelers can sleep in well-appointed rooms (priced at around $100 to $250 per night), dine and conduct meetings surrounded by the works of Georg Baselitz in Berlin, A.R. Penck in Dresden, Katharina Sieverding in Potsdam and Donald Sultan in Budapest.

Instead of simply supplying pieces for display in the hotel, art’otel artists work to varying degrees with the architects and decorators to help design the interiors. In Budapest, where the newest art’otel is sited, five large paintings by Sultan hang in the hotel’s common areas, and hundreds of prints and drawings are displayed in the hallways and guest rooms. Sultan also designed the carpets and the lobby fountain, and his images appear on matchbook cowers, menus and dinnerware. Each room also has a castaluminum black bird designed by the artist perched in a corner, copies of which are sold in the hotel shop for $25.

The art’otel chain was started by German developer and collector Dirk Gaedeke in the mid `90s. Park Plaza Worldwide became a partner in the enterprise in 1999 (chairman Jonathan Read is also an art collector). The corporation, which owns the works in each hotel, is considering artists to work on sites in Marrakesh, London and Paris, and there are plans to open new locations in L.A., Chicago, New York and numerous other cities within three years.

In New York, several new hotels feature works by prominent artists. At the midtown Hudson, owned by Ian Schrager, Francesco Clemente designed the ceiling in the bar and painted the bedside lamps, essentially mini-light boxes, in the guest rooms. (The lamps will feature the work of different artists on a rotating schedule.) Photo works by Jean Baptiste Mondino are located in the library and cafeteria. The nearby Chambers hotel, owned by Ira Drukier, Richard Born and Steve Caspi, has selected some younger artists along with more established ones, commissioning works from James Siena, Michael Lazarus, Udomsak Krisanamis, Do-Ho Suh, John Waters, Sheila Pepe, Nina Bovasso and others.

For the Embassy Suites in Battery Park City and the Hilton Times Square, the Public Art Fund helped commission works from nearly 50 artists. Major works at the Embassy Suites include an 11-story-high wall drawing by Sol LeWitt and a mural by Pat Steir, while 75 figures by Tom Otterness are sited in and around the Hilton’s lobby and entrance. Among the other artists with works in the two hotels are Bernd and Hilla Becher, Louise Bourgeois, Daniel Buren, Dan Flavin, Nan Goldin, Kurt Kauper, Ellsworth Kelly, Jeff Koons, Nam June Paik, Elizabeth

Peyton, Mary Heilmann, Julian Schnabel and Hiroshi Sugimoto.

Winston Hotels announced that one of its wholly owned subsidiaries entered into a five-year line of credit with General Electric Capital Corp. The line provides for revolving loan commitments of up to $155 million. Borrowings bear interest at rates from 30-, 60-, 90- or 120-day London interbank-offered rates plus 1.75 percent to 2.50 percent. The current interest rate is 30-day LIBOR plus 2 percent.