BURBANK, CA—Lincoln Property Co. has purchased the Burbank Collection, a three-building office property in Downtown Burbank from Kennedy Wilson. The buyer plans to invest significant capital to reposition the property into a modern creative office campus to attract media and tech tenants in the area. The sales price for the property was not disclosed; however, industry sources unrelated to the deal say that the three properties were purchased for a combined total of approximately $72 million.

“We are seeing incredible improving fundamentals in the Southern California market. We are excited to be acquiring property that needs a new vision and a new plan, and that can be transformed into a preferred product type for tenants today, which is more of an urban campus,” David Binswanger, EVP at Lincoln Property Co., tells GlobeSt.com. “Burbank is in a market that statistically has 14% vacancy rate, but half of that vacancy is made up of one project that was recently renovated and is on the verge of leasing up 40% of their space. Over the next quarter or two, we think that vacancy rate is going to get cut in half, and there will be some upward pressure on rents. At the same time, we will be renovating the building to a more modern creative office urban campus.”

Lincoln Property Co. plans to invest north of $5 million, not including tenant improvements, into the property to transform it into a creative office campus, complete with outdoor work areas, pedestrian walkways, dining terraces and public art on display. The buildings, which were originally built in the 1980s, will be opened up and modernized to create a true campus feel. “The whole bar as moved so that everyone wants offices with outdoor spaces, a variety of food services and urban textures with park features and mural walls,” says Binswanger. We will open the buildings up to create a much more hospitable and residential feel in an office complex. I think all tenants prefer this type of space.

With the renovation, the company plans to attract media and tech tenants to fill the remainder of the building, especially those who have been pushed out of the Hollywood market due to tightening supply. “Burbank historically has been a very strong media market, and it continues to be a strong media market,” says Binswanger, who adds, though, that the property will attract a broad spectrum of users. “We think the creative type of space isn't just for creative companies. You are seeing industry leaders that are looking for highly creative, highly interesting real estate. Even the most traditional users are looking for more creative space, in the sense that they want a more inviting environment with commissaries and cafeterias.”

Located at 303 N. Glenoaks Boulevard, 333 N. Glenoaks Boulevard and 300 E. Magnolia Boulevard in Burbank, the three buildings make up half of the class-A office product in the market, and include two parking garages. The property is 83% leased to a tenant mix that includes the Cartoon Network and Nickelodeon. It is located walking distance from the Burbank Town Center and the shops and restaurants on San Fernando in Downtown Burbank.

The Downtown Burbank market is popular area that is well known for its walkability. Last month, a value-add investor scooped up a rare distressed multifamily asset in the area. Once the investor completes renovations, they plan to push rents by as much as $500 per month.