Mutual of N.Y. takes back Glendale Corporate Center.

Mortgage lender reclaims building in foreclosure sale 

Heated competition along Glendale's prestigious Brand Avenue skyline has forced a nearby office tower into foreclosure, real estate sources said.

Through a Sept. 23 trustee's sale, mortgage lender Mutual Life Insurance Co. of New York took back the seven-story Glendale Corporate Center at 425 E. Colorado St. from Glendale's Jensen family.

The 113,032-square-foot project completed in 1984 was the third Tri-Cities (i.e., Burbank/Glendale/Pasadena) office property MONY has taken over through foreclosures this year, according to title records. Last January, the $17.3 billion-in-assets insurer also took back twin Pasadena office buildings, totaling 220,000 square feet.

Records show that Colorado Corporate Center Limited Partnership took out a $15.5 million loan from MONY in August 1987. Les Jensen and his children, Leonard and Anita Jensen, who have developed and invested in several Tri-Cities apartment and commercial properties, are listed as the group's general partners. A notice of trustee's sale dated Aug. 4 specified an unpaid balance of just over $18.3 million.

The brokers responsible for marketing the property noted that a late-1980s wave of Class A office development along the Brand Corridor downgraded the development's once-promising prospects.

As CB (formerly Coldwell Banker) Commercial Real Estate Group brokers began marketing the development in 1984-85, Glendale Corporate Center was "considered a pioneer" of an emerging "East Colorado" office submarket just southeast of the downtown Glendale core, recalled CB Senior Vice President Bill Boyd, who manages the brokerage's Tri-Cities office.

But as four new "institutional quality" office towers opened on Brand in 1987, "East Colorado never got the momentum we'd expected" as a "lower-cost alternative" submarket because the heavy competition drove down Brand rents, Boyd said. As the first wave of five-year leases began reaching their "roll-over" dates, the building lost some of its "professional" tenants to the ritzier Brand buildings, he added.

Considering that the Brand Corridor remains highly competitive amid the area's general economic recession, "it just wasn't feasible" for a family partnership with such mortgage obligations to spend more money marketing the property and improving space for new tenants, said CB First Vice President Laura O'Brien.

Characterizing the project as "an 'A' building in a 'B' location," O'Brien added that MONY "shouldn't have to spend a whole lot" to improve the center's current 78-percent occupancy rate. She now shares the property's listing on MONY's behalf with CB Vice President Boyd Smith.

Stuart Simon, MONY's director of asset management, said the insurer's "entrepreneurial, pro-active" real estate group "remains very committed" to the foreclosed properties and to the Tri-Cities marketplace. "We are reviewing our strategic options right now and will do what needs to be done to make (the buildings) attractive to the marketplace."

MONY had taken back two 1984-vintage Pasadena office properties at 2923 and 2947 Bradley St. from an affiliate of VMS Realty Investments, the Chicago real estate syndicator that has relinquished much of its extensive national portfolio to its lenders.

Title records indicate VMS had acquired the buildings in 1987 from the developer, a partnership affiliated with Boston's Cabot Cabot & Forbes, and taken out a $14.65 million mortgage from MONY. A January trustee's deed upon sale specified an unpaid balance of approximately $18.4 million.

The buildings have been vacant since Home Savings moved its headquarters and much of its operations to Irwindale more than two years ago. Todd Doney, the Cushman Realty Corp. broker marketing these buildings, said proposals are under negotiations with tenants interested in 175,000 square feet in the two buildings.