Defense agency, University of Phoenix agree to leases totaling $10.2 million
06:00 AM PDT on Tuesday, July 27, 2010
By CHRIS H. SIEROTY
Two lease deals totaling more than 60,000 square feet and valued at $10.2 million have been inked at University Plaza at Waterside Centers in Ontario, the The Hileman Company LLC, who owns the property in a joint venture with Pacific Coast Capital Partners, announced Monday.
Jack Hileman, founder and president of the Beverly Hills-based real estate management and investment services firm, said in the larger of the two deals, The University of Phoenix signed a 5 ½-year lease extension that will keep the Ontario Learning Center in 50,000 square feet of space through 2017. The lease extension is valued at approximately $7.6 million, he said.
The University of Phoenix’s Ontario Learning Center was one of the original tenants of the five-story, 100,000-square-foot building at 3110 E. Guasti Road, which was built in 2004.
In the second transaction, Defense Contract Management Agency, or DCMA, has signed a 10-year lease for 11,500 square feet to house the Ontario office of its Aeronautical Systems Division in a deal valued at approximately $2.6 million.
The DCMA is a division of the U.S. Department of Defense that works with the department’s suppliers to ensure that supplies and services are delivered.
The DCMA has 9,000 civilian employees and 562 military personnel in 42 offices throughout the United States with active contracts worth more than $1 trillion, according to the agency’s website.
“The new lease with the (DCMA) took nine months to negotiate, and the renewal with University of Phoenix took about the same,” Hileman said. “In one instance, we were dealing with a government agency who typically moves at their own speed in any market, and in the other instance, we had a tenant who still had ample time remaining on their existing lease yet wanted to take advantage of today’s tenant-favorable leasing market.”
Hileman said the transactions raise the lease rate at University Plaza to 75 percent, which is part of a 16-acre master planned Class-A office campus.
The new leases were announced about eight months after the company announced that Community Bank of Pasadena had signed a six-year lease to occupy 7,400 square feet at the University Plaza building. The Community Bank lease was valued at $1 million.
“Both (of these new deals) are significant leases with quality tenants so combined they secure a stream of stable cash flow to the project on a long term basis,” he said.
Besides University Plaza, the upscale complex includes Waterside I and Waterside II. Currently Waterside I is 85 percent leased, while the six-story Waterside II, the center’s newest building, remains a 100 percent vacant, he said.
Moving forward, Hileman said his firm and their co-owner, Pacific Coast Capital Partners, continue to focus their efforts “on securing a major tenant who will occupy a large amount of space for the newest building at Waterside Center.”
“For the other two buildings, which are now significantly leased, we remain focused on smaller tenants to infill the remaining spaces we have available,” he said.
The company and Pacific Coast Capital Partners acquired the office complex in April 2007 for $53 million from The Trenton Group.