Motown, Kaufman & Broad to relocate in $10 million deals; LaSalle gains major tenants at 2 buildings on Westside.

Two high-profile firms have just signed long-term leases relocating their corporate headquarters, with each deal thought to be valued well in excess of $10 million. Motown Record Co. L.P. will join other entertainment firms moving from Hollywood to Miracle Mile, while Kaufman & Broad Home Corp. will shift from one Westwood highrise to another.

Diversified Chicago real estate firm LaSalle Partners is a primary beneficiary of the transactions. It manages and leases both buildings, and its institutional clients also have substantial investments in both properties.

After an 18-month search and negotiation period, Hollywood-based Motown has selected the Miracle Mile district -- and the Wilshire Courtyard office complex -- for its new headquarters.

The popular rhythm-and-blues recording company will move from its home at 6255 Sunset Blvd. next January, joining several other "household-name" media and entertainment firms that have migrated to the Miracle Mile in recent years.

The move to just over 60,000 square feet on the third floor of Wilshire Courtyard's west tower -- 5750 Wilshire Blvd. -- will essentially double the size of fast-growing Motown's offices, said Rosey Miller, senior vice president with brokerage Grubb & Ellis Co.

Motown hired Miller a year and a half ago to evaluate the firm's facilities costs and develop a strategic plan.

After analyzing potential relocation sites in several Westside submarkets, Miller focused on the Wilshire Courtyard project and negotiated a deal on the Polygram unit's behalf. His counterparts on the landlord side were LaSalle's Mary Taylor and Brian Ross.

J.H. Snyder Co. developed the 1 million-square-foot Wilshire Courtyard complex. LaSalle later funded a "convertible" mortgage giving it an option to convert the debt into equity on behalf of its institutional investor clients, real estate sources explained.

Financial details of the seven-year lease were not released, but local real estate sources speculated that the deal's consideration value probably exceeds $10 million -- based on an estimated "effective" annual rent of about $24 per square foot. Miller said the deal's tenant buildout package was a key issue in the negotiations.

Miller, who has also represented entertainment firms such as Atlantic Records, Elektra Records, de Passe Entertainment and Time Warner, noted that the "amenity-rich" Wilshire Courtyard reflects the image Motown Chairman Clarence Avant and President Jheryl Busby want the firm to project.

The move from four floors at Trizec Properties Inc.'s Hollywood building to one floor at the Wilshire Courtyard also offers superior efficiencies -- and will encourage more interaction between upper management and Motown staffers, Miller continued.

Motown follows other "name" firms that have helped make the Miracle Mile a significant media mecca in the early 1990s. Spelling Entertainment Inc., Daily Variety, Hollywood Reporter, Petersen Publishing Co., Screen Actors Guild and others have moved from in and around the struggling Hollywood area.

Recent leasing activity in the Miracle Mile -- much of it by media-related tenants -- is quickly reducing vacancies within the district's "Class A" office buildings, noted John Stern, principal in his namesake local brokerage.

Meanwhile, in a separate development, publicly held Kaufman & Broad -- the Western U.S.'s biggest homebuilder -- will move across Wilshire Boulevard and two long blocks west. Building-top signage and lease economics drove the relocation deal, noted Bart Pachino, K&B senior vice president/general counsel.

Five years ago, K&B became one of the first tenants to sign up at the ritzy new Center West tower, 10877 Wilshire. Rather than renewing there when its five-year lease term expires next spring, however, K&B will move to the nearby highrise -- until recently known as Oppenheimer Tower -- at 10990 Wilshire.

The LaSalle-led partnership that owns the 10990 tower lured K&B with prominent building-top signage -- something Center West developer Kam Hekmat wasn't willing to offer, Pachino noted.

Last fall, New York securities brokerage Oppenheimer & Co. agreed to move two blocks east along Wilshire to the highrise previously identified with the building-top "MAXXAM" sign.

While the growing homebuilder's corporate staff has been happy with its 12th-floor headquarters offices, the LaSalle team offered a "substantially" more affordable lease package than Hekmat -- as well as the signage -- Pachino said.

K&B, which has been leasing about 21,000 square feet at Center West, will initially occupy to-be-renovated former Oppenheimer offices covering all of floors six through eight, plus a portion of the fifth, at the 10990 tower.

The 10-year lease stipulates that the new tenant will occupy the balance of the fifth floor -- for a total of about 48,000 square feet -- in 1996.

Jim Travers and Lawson Martin of Travers Realty Corp. represented K&B in the negotiations. LaSalle's Bill Thummel, Mike Ibera and Pat Hunt participated on the landlord side.

Terms were not announced, but local real estate professionals speculated that an "effective" rental rate of at least $25 per square foot annually would value the deal at about $12 million.

Mike Geller, principal with Center West leasing agent First Property Realty Corp., said he's sad to see K&B go, but noted that K&B executives were enticed by the prospect of signage visible from the nearby San Diego (405) Freeway.

Other local brokers noted the expansion and move represents "positive net absorption" of more than 25,000 square feet for core Westwood highrises. Combined with other deals, the Westwood skyline has absorbed more than 150,000 square feet this year, some sources calculated.