Herbalife in talks for construction of new headquarters.

A blockbuster of a deal is developing at the Howard Hughes Center, the office complex just off the San Diego (405) freeway in West Los Angeles.

Center owner Arden Realty Inc. is negotiating with Herbalife Ltd. to build a 212,000-square-foot headquarters for the company, according to several sources close to the deal.

Arden spokeswoman Brooke Lauter confirmed that the two companies are talking, but declined to comment further. "Discussing Herbalife negotiations fight now is premature," she wrote in an e-mail.

The two sides have been talking for several weeks, but negotiations recently turned serious, the sources said. Some sources said Arden has a signed letter of intent, but others say Herbalife is still looking at other options.

Herbalife spokeswoman Barb Henderson said the company didn't "have information for a real estate story."

The sources said Herbalife, which has been on the market for roughly 200,000 square feet for nearly two years, wants to resolve its headquarters location by year's end. The company is based in Century City and leases a building in El Segundo for back office operations.

If a deal can be hammered out, the Herbalife building would be next to Univision Communications Inc.'s offices and, like Univision, it would have building-top signage and freeway frontage. Herbalife would move out of its Century City digs but retain its El Segundo space.

A build-to-suit would require at least a 10-year deal and rents would likely range from $3.25 to $4 a square foot, market sources said. That places the value of a potential deal starting at $82.7 million.

Staubach Co.'s John McRosky, who is representing Herbalife, didn't return messages. Arden is being represented internally by Scott Chalmers, who also didn't return calls.

Separately, Arden is moving forward with plans at the Howard Hughes Center to build a 160,000-square-foot office building on spec, meaning that the real estate investment trust doesn't have a lease with an anchor tenant.

Westside landlords like Arden are feeling confident that vacancy levels will continue to drop, allowing them to command higher rents at their buildings in the next several quarters.

Office markets in Santa Monica, Beverly Hills, Brentwood and Westwood are filling quickly. Arden is banking on that tightening office market pushing deals into Century City, which has the highest vacancy rates on the Westside, and its Howard Hughes Center.

Staff reporter Andy Fixmer can be reached by phone at [phone], ext. 263, or by email at [e-mail].