Tale of Two Projects: One Full, the Other Half-Empty.

ONLY a few miles apart, Media Studios North in Burbank and the Glendale Plaza in Glendale might as well be in different countries as far as their acceptance by tenants is concerned.

The Burbank project is fully leased.

The Glendale building has only signed four tenants in the seven months since opening.

Both developments were built at the beginning of the most recent speculative building craze and both have roughly the same lease rates. But they were handled very differently.

Media Studios North is the brainchild of developer M. David Paul, who created, a low-rise, landscaped business campus. From the beginning, the Burbank development was envisioned as a user-friendly environment for entertainment companies. It was greeted with open arms - and pocketbooks.

"M. David Paul was kind of visionary to know that this is the way to do things," said Steve Donley, administrative officer for the city of Burbank. "Businesses are now looking for more personal, campus-like atmospheres."

Media Studios North is only one component of what has been planned. Santa Monica-based M. David Paul Development has received permits from the city for a 1.2 million-square-foot project, which will be completed in phases as demand grows.

Phase I, a four-story, 200,000-square-foot building that was completed several years ago, had been pre-leased to Disney Feature Animation. Phase II's five-floor, 215,000-square-foot building was completed in October 1998, and is fully rented. Phase III, a three-story, 100,000-square-foot building, is slated to break ground before the end of the year, to be completed at the end of 2000.

Project Manager Jeff Worthe says today's typical business client prefers an environment that is conducive to longer hours. With a commissary, a private health club, a sand volleyball court, a nine-hole putting green and a three-mile jogging track along the outside of the project, Worthe says the building is a more pleasant lace to spend long hours than most.

"I definitely think the product type -- with low-rise buildings, outdoor areas, and abundant parking -- this is an environment they don't mind being at for 12 hours a day," he said.

He believe there is still considerable demand for such low- to mid-rise campus buildings. "We're definitely going to do more of them. We see the lower to mid-rise buildings being preferred to the high-rise. They want the ability to get more people working together on one floor," Worthe said.

Last week, Media Studios North became 100 percent occupied when its final tenant, Residential Funding Corp., signed a lease for 43,000 square feet. The company also looked at Glendale Plaza before signing the deal.

"We were toe to toe with Glendale Plaza on that one," said Brad Feld, who is the Cushman & Wakefield leasing agent for the Burbank project. "We won not because we were less expensive, but because of all the creature comforts and the very productive work environment."

If Media Studios North was rewarded for being a low-rise campus, Glendale Plaza has been punished for being a high-rise.

The project was the largest speculative building to be developed in recent years. A joint venture of PacTen Partners and Morgan Stanley Real Estate Fund, the 24-story, 529,000-square-foot office tower was packed with fiber optics in a bid to lure Internet and entertainment companies. But those types of businesses don't appear to be looking for high-rise space.

"The Glendale project represents an old model of how things were developed -- the very traditional corporate model of occupying an office tower," Donley said.

The developers were also a victim of timing. Although Glendale looked like a hot and rapidly expanding market at the time the project was entitled, things have cooled considerably since then. The city's vacancy rate is currently 14.6 percent, according to Cushman & Wakefield Inc.

"Glendale, for the first time in seven to 10 years, is the softest of the three cities in the Tri-Cities market (the others being Burbank and Pasadena)," said Bill Boyd, senior vice president at Grubb & Ellis Co.

Boyd notes that most large entertainment companies stopped leasing office space in the Tri-Cities area about two years ago and shifted to the Westside. Meanwhile, the large studios in Burbank and Glendale have ample room in their existing facilities to expand.

So far, Glendale Plaza's brokers have leased about five floors (135,000 square feet of the tower, about 25 percent) to State Compensation Fund, and two floors to Regus Business Centers. No entertainment companies have leased any space.

While the difference in price between Glendale Plaza and Media Studios North is not all that great ($31 per square foot per year and $30, respectively), tenants seem to perceive a greater value for their money in Burbank.

Jeanne Armstrong, director of development services for the city of Glendale, points out that Glendale Plaza on Central Avenue is on the fringe of the downtown area, where amenities such as restaurants, shops and movie theaters are not as accessible as buildings on the more centrally located Brand Boulevard.

Boyd of Grubb & Ellis agrees. "Brand has historically been the preferred address, that's where the town has grown up," he said. "Central may be a secondary address."

The building's owners aren't discouraged.

"Right now, we're looking at leasing activity that will push us north of 60 percent in the near future," said John Barganski, vice president of marketing and leasing for PacTen Partners. "We would all like more activity, but we're happy with the level of market share we've derived."