Speculative Fever

It has been several years since Southern California has seen the development of a major speculative office building, one that starts construction with few or no tenants signed up. But now as the region’s economy bounces back and office rents rise, developers are eager--perhaps too eager--to claim bragging rights to the first “spec” building in town.

“Many developers would like to hang their hats on their ability to predict the market first,” said Nick Christensen, a Westside broker for CB Commercial. “They see it as a big marketing ploy to be the first to come out of the ground.”

This month, for example, PacTen Partners and Morgan Stanley Real Estate Fund II had invited visitors to attend the Aug. 7 groundbreaking of their 24-story Glendale Plaza, which was described as “‘Southern California’s first speculative office building in nearly a decade.”

But wait. Nearly a month earlier, Transpacific Development Co. broke ground on a two-story, 50,000-square-foot office building in Cerritos that it claims is “the first new spec office building in Los Angeles County in several years.”

In light of the Transpacific groundbreaking, PacTen Partners revised its description of the Glendale tower.

“It’s a low-rise building,” a PacTen spokesman said of the competing project in Cerritos. “We are claiming to be the first spec high-rise building.”

Jesus Sanchez can be reached by e-mail at [email protected] or by fax at (213) 237-7837.