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Thursday, Mar 28, 2024

Real Estate Column—War to Develop Warner Ridge Goes On … And On …

Remember Warner Ridge? No. We’re not talking about a Civil War, though the Warner Center parcel so named did engender a few clashes along the way in the storied tale of its development. The 21.5-acre parcel that took decades to wind its way through the city approval process, until it was finally acquired by Legacy Partners for development as a multi-family residential complex, looked like it was good to go by the end of 1999 with a projected completion for the first phase by the last quarter of 2000. But the land that lies on the eastern edge of Warner Center on DeSoto Avenue between Oxnard Street and Victory Boulevard is still, well, lying there. “It looks like we’re scheduled to be back on line on the site March 1,” said Dennis Cavallari, senior vice president and a partner with Legacy. The parcel has been graded, but building did not commence as expected because the various delays the company encountered wreaked havoc with the initial budget, Cavallari said. “Our costs were moving around,” he said. “Until our costs stopped moving, we couldn’t finalize the loan.” Warner Ridge, which will include about 580 luxury apartment units when completed, will cost about $150 million, a figure Cavallari concedes is considerably higher than the company’s original estimates. How much more? “It’s more than 10 percent,” he said, declining to be more specific. A large part of the increase is due to the cost of carrying the land through the delays, Cavallari said. The first phase of the development, including 315 units, is now slated for completion by February 2002. The second phase, with another 264 units, is due to be finished by May 2003. Because of the difficulty nailing down costs, Legacy is still determining what the rental ranges for the units will be. Warner Ridge has been on the development table since the mid-1980s when a developer who intended to build a commercial complex on the site first acquired the parcel. That developer, Spoud Development, went belly up during the recession of the 1990s, after battling the city of Los Angeles and community residents who opposed the project for years. Warner Ridge was acquired by Katell Properties in 1996 under a plan to construct a combination of offices and residential units. Katell initially sold off somewhat more than 5 acres to Legacy for residential development, intending to construct about 700,000 square feet of offices on the remaining parcel. Then, after several years during which the firm’s president, Gerald L. Katell, waffled between keeping the commercial plan or switching to residential development, the remaining land was finally sold to Legacy, which then expanded its residential design. Play it Again It looks like Kilroy Realty Corp. is about to reprise the success it had with the first phase of its Calabasas Park Centre development. The company has snagged the first tenant for the second phase of the project, another 100,000-square-foot building next to the Commons at Calabasas shopping center, due to be completed next month. 20th Century Fox Film Corp.’s distribution division has inked a deal for 10,225 square feet in the project at 23975 Park Sorrento. The five-year lease is valued at $1.5 million. The Fox division will be moving from the Trillium in Warner Center. The first phase of the project, completed last June, was fully leased by the time it opened. Tenants include Ryland Homes and Voluntary Plan Administrators. Bill Inglis, a broker with CB Richard Ellis Inc., represented the developer. Doug Marlow and Jeff Pion, also with CB, represented the tenant. Technical Move Cognet Microsystems has leased 20,000 square feet at the Calabasas Tech Center on Agoura Road. The fiber optics company plans to consolidate its Westlake Village operation and its corporate headquarters, currently in West Los Angeles, at the new address. “They needed to be in a location where they would be able to attract engineers,” said Tom Festa, a broker with Grubb & Ellis who represented the tenant in the transaction. Calabasas, at the eastern end of the 101 Corridor, has become one of the meccas for highly skilled workers. Sam Monempour and Jim Lindvall, also with Grubb, worked with Festa on the deal. The landlord, Arden Realty Inc., was represented by Mike Slater and Tom Dwyer at CB Richard Ellis Inc., along with Gary Cohen of Arden. Woodland Hills Move AIS Insurance Service signed a five-year deal for 13,517 square feet of offices at 21900 Burbank Blvd. Bill Inglis and Bob Shafer at CB Richard Ellis Inc. represented the landlord, Unova Master Trust. Robert Zelkin at Jones Lang LaSalle Partners represented AIS. Shopping Around Several area shopping centers have changed hands recently. Regency Realty Corp. has sold off a portion of the San Fernando Value Square, a shopping center it acquired last May. Regency, which acquired the center from K/B Partners, is retaining 114,423 square feet of the center, which houses a Home Depot. The company has sold 128,661 square feet to The SFVS Co. LLC. In Simi Valley, an independent investor purchased Freeway Shopping Center for under $1.3 million. Steven E. Manios purchased the fully-leased, 8,400-square-foot center from J. Howard Investments Ltd. The center’s tenants include Bikeworks and Labor Ready. Gary Seaton of NAI Capital Commercial represented the buyer and seller. Staff reporter Shelly Garcia can be reached at (818) 676-1750, ext. 14, or by e-mail at [email protected].

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