Tishman Speyer Has Plans for Corporate Pointe Parcel

The big New York real estate company that recently paid an eye-catching $360 million for Santa Monica’s MGM Plaza office complex now plans to develop a new commercial campus in Culver City’s Fox Hills district.

Tishman Speyer Properties, which has extensive holdings on three continents, is under contract to buy about 11 acres south of Slauson Avenue comprising the undeveloped portion of Corporate Pointe office park.

The takeover of the development abandoned during the early 1990s recession reflects the strong recovery of the commercial districts surrounding Los Angeles International Airport and south of the costly Westside.

While Tishman Speyer hasn’t made a formal application for new construction to Culver City officials, redevelopment administrator Miriam Mack said the company is under contract to purchase the property and is now performing “due diligence� investigations.

Tishman Speyer declined to discuss its plans or reveal how much it intends to pay for the property.

Mack expects Tishman Speyer to pursue construction of a low-rise office campus on a portion of the property and possibly build a twin to the 12-story 600 Corporate Pointe office tower on the balance of the site.

While Corporate Pointe’s original developer--Bramalea California--received city approval for the planned 12-story tower, no formal plan has been approved for the additional acreage. A new proposal would require environmental impact review and a nod from city authorities.

“We’re anxious to see something built,� Mack said. “It’s prime property and we think the time is right to see it developed.�

Bramalea’s lender, Bank of Montreal, has been in control of the site for years but never formally took ownership, Mack said.

As the local economy expanded in the 1980s, Fox Hills office projects such as Corporate Pointe were developed as lower-cost alternatives to prime Westside office space.

During the last half of that decade, Canada-based Bramalea completed office buildings at Corporate Pointe totaling more than 550,000 square feet.

But as demand fell sharply with the subsequent recession, mortgage lenders ended up taking control of a substantial portion of the Fox Hills district’s office buildings. When the economy showed signs of recovery, opportunistic buyers picked off the Bramalea-developed buildings one by one.

Newport Beach real estate operator Layton Belling & Associates and Boston realty advisor AEW Capital management bought the two biggest Corporate Pointe buildings through foreclosure-related sales in 1995 and 1996. Brentwood’s Arden Realty later bought each of those buildings through separate transactions.

Amid strong tenant demand, a slow-moving office construction pipeline and tight vacancies in the traditional Westside districts, rents in the Fox Hills area have typically doubled over the last three years to about $30 per square foot annually. Brokerage Colliers Seeley reports that Culver City office vacancies have fallen from just over 6% in mid-1999 to barely 1.5%.