Veterans Boyd, Lee Head New Dunn Tri-Cities Office

The Boyd-Lee team, which has executed a combined career total of $2 billion of sales and leases primarily in the Tri-Cities market, has already lined up 500,000 square feet of landlord assignments. Boyd and Lee formerly specialized in the Tri-Cities market from the Downtown L.A. office of Grubb & Ellis, where the brokerage firm based its Tri-Cities operations after closing its Glendale branch. Boyd also specialized in the Tri-Cities market for 17 years with CB Commercial, the predecessor to CB Richard Ellis.

In addition to landlord representation, the new Charles Dunn office is providing tenant representation and investment sales services. Besides Boyd and Lee, the new Tri-Cities/San Gabriel Valley team includes associate Peter Pearce.

The opening of the new office comes at a time when the Tri-Cities market of Glendale, Burbank and Pasadena is adjusting to the same new market realities that are affecting office markets across Southern California and the US. Lee tells GlobeSt.com that the markets have turned so quickly that in one case, the effective rent for a three-floor lease now being negotiated in a Burbank office building is 15% lower than the rent for a two-floor lease in the same building just nine months ago. Part of the reason for that lower rent is that the deal in question includes six months of free rent—compared with no free rent just a year ago. This is happening despite the low 3.5% vacancy rate in Burbank, Lee points out.

The primary focus of landlords today is tenant retention, Boyd and Lee say, with landlords pushing for renewals as soon as possible in order to maintain their tenant bases. But as Lee notes, tenants today are often reluctant to renew too soon because of uncertainty about both the economy and their own businesses.

As a result, brokers today need to be able to provide tenants with more creative solutions for their space needs, such as negotiating more flexibility in leases to provide options for expanding or downsizing within a building, Lee says. She says that landlords are adjusting their expectations because they realize that the economy is affecting the tenants' businesses as well as that of the landlords.

Boyd adds that on the landlord side, building owners are looking for help in gauging where the market is going in order to keep and capture as many tenants as possible. He notes that he and Lee have leased nine of the 12 major office buildings in Glendale at one point or another, so they have a good idea of how the market ebbs and flows there and in other parts of the Tri-Cities market.

One factor working in favor of landlords of established buildings is that tenants generally are reluctant to move in today's uncertain economic conditions, according to Boyd. Some 800,000 square feet of new space is coming onto the market in Burbank, and Boyd says that in better economic times tenants would be more likely to consider a move to some of the new space. But in today's world, he says, moving is an expense that most tenants want to avoid, especially when rents in the new buildings are likely to be higher than those of existing buildings.

Boyd has participated in leasing and sales transactions totaling in excess of more than $1.7 billion, and has been on leasing teams of over 5.25 million square feet of office space throughout the Los Angeles area. The Dunn Co. announcement regarding the new office notes that no other office building broker has participated in as many lease transactions or been responsible for the leasing of as much office building square footage in the Tri-Cities office submarket. Lee, with a cumulative transactional value totaling more than $400 million, participated in many of the market's most significant transactions during her Grubb & Ellis career.

With the opening of the new Dunn office, at the Glendale Galleria office tower at 100 W. Broadway, the Los Angeles-based company now operates an office in every major submarket throughout the Greater Los Angeles area. The new office "complements our plan to have a strong presence in the key markets throughout the Los Angeles and Orange County areas," says Dennis Slattery, senior managing director of Charles Dunn Co.