Tenant issues clouding future of constellation project. (Real Estate).How long the stars will remain aligned for Century City's Constellation Place remains to be seen. While it's business as usual at the 700,000-square-foot office project, which is scheduled for completion mid-2003, questions surround the stability of its two anchor tenants - Metro-Goldwyn-Mayer Inc. and International Lease Financing Corp. MGM MGM in full Metro-Goldwyn-Mayer, Inc. U.S. corporation and film studio. It was formed when the film distributor Marcus Loew, who bought Metro Pictures in 1920, merged it with the Goldwyn production company in 1924 and with Louis B. Mayer Pictures in 1925. , which is taking 350,000 square feet in a deal in excess of $250 million, is being shopped by Kirk Kerkorian. Meanwhile, commercial airline leasing company ILFC's decision to double its space by taking 125,000 square feet at Constellation Place came about a year before its industry was rocked by the Sept. 11 attacks. While local sources believe that ILFC ILFC International Lease Finance Corporation ILFC International Lunar Finance Commission (TV show: Space: 1999) , whose parent company is insurance giant AIG AIG addressee indicator group (US DoD) AIG American International Group, Inc AiG Answers in Genesis (religious group in defense of Scripture) AIG Artificial Intelligence Group AIG Australian Industry Group , will occupy most of its new space, there's a chance that a portion of MGM's space will be up for sublease sublease n. the lease of all or a portion of premises by a tenant who has leased the premises from the owner. A sublease may be prohibited by the original lease, or require written permission from the owner. , depending on whether the film and television studio is sold and to who. "If Fox buys it, maybe there's a bunch of redundancy there," said Hunt Barnett, senior managing director at Insignia/ESG Inc. "If Bertelsmann buys it, there's no redundancy." Gary Weiss, former managing director for the recently shuttered real estate arm of Credit Suisse First Boston Credit Suisse First Boston was originally the trading name of the Financière Crédit Suisse-First Boston, a London-based 50-50 investment banking joint venture formed in 1978 between the First Boston Corporation and Credit Suisse. , noted that if a portion of the MGM space is put up for sublease, it could hurt further leasing efforts by developer JMB JMB Journal of Molecular Biology JMB Jama'atul Mujahideen Bangladesh JMB Jamaatul Mujahideen Bangladesh (Islamic terrorist group) JMB Joint Matriculation Board JMB Joint Maintenance Board JMB Journal of Mathematical Behaviour Realty Corp. None of these issues were a concern when the project broke ground in the third quarter of 2000. ILFC and MGM had just signed deals about a dollar above Century City's $3.30 asking rents at the time, with MGM having the option to take an additional 75,000 square feet. MGM already has said it would not exercise that option, and Century City's vacancy rate has nearly doubled, with 375,000 square feet being put back on the market since JMB broke ground. Despite the current downturn in all businesses related to the commercial airline industry, John McRoskey, senior vice president at CB Richard Ellis CB Richard Ellis Group, Inc. NYSE: CBG is a multinational real estate corporation currently based in Los Angeles, California, U.S.A.. On December 20, 2006, the corporation, also known as CBRE, completed acquisition of Trammell Crow Co. in a transaction valued at $2. , said that ILFC's space demands are unaffected. "It hasn't lessened any of their requirements so far," said McRoskey, who repped ILFC on its deal at Constellation Place. |
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