Apartment vacancies in the San Fernando Valley averaged 4.1 percent in the third quarter of 2007, according to the Hanes Apartment Advisor, a publication of Westlake Village-based Hanes Investment Realty. That average is slightly skewed by Woodland Hills, which posted a whopping 11.3 percent vacancy rate during the same period, primarily thanks to just a couple of large apartment complexes opening in the past year. One of those, the Archstone Warner Center, is only 54 percent occupied with 284 of the 522 units in the building containing residents. The first phase of the project opened in November 2006 and all units were available as of August 2007. Archstone rental rates range from $1,648 for a 1 bed/1 bath to $2,893 for a 3 bed/2 bath. The folks who are developing the Triana apartment building on Canoga say that doesn’t have them worried. “We think the absorption in the area overall is very deep,” said Derek Empey, Project Manager for Houston-based developer/builder, The Morgan Group, Inc. “We think you’ll find that if you look at individual projects in the greater Woodland Hills area that a lot of that depth in vacancy rate is isolated to a few projects.” Morgan’s former project, The Pointe at Canoga and Erwin right next door to the Triana, was built in 2004 and is currently 94 percent occupied. Triana’s preleasing activity is underway, according to Marketing Director Jody Ladue. “We’re starting right now to take applications and deposits,” she said. “So far we have more than 100 names on the interest list.” The leasing office will open in the latter part of December and the first phase of 206 units will be open for leasing and move-in in January 2008. By May, 2008, all 362 units are expected to be complete “I think people are looking for niche product,” said Empey. “They want a very high-quality, well-managed property that makes a statement.” With 1 bedroom units starting at $1,950 per month and ranging to $3,000 for a 3 bedroom/2 bath with a den, they are definitely targeting the luxury market. Amenities available to residents will include a glassed-in full-size basketball court, a private movie screening room, a sports lounge with wide-screen plasma televisions and a wine cellar. Yes, even apartment residents can now have their own, private wine lockers. Apartment Transactions The Hanes Advisor reports that transactions in the Valley’s multi-family market fell 37.4 percent from the first quarter. The average cost per square foot increased 5.6 percent and the average rent per square foot increased 7 percent. Dean Zander of Hendricks & Partners has been involved in two large transactions recently. The Pavilion Apartments, a 142-unit at 550 North Laurie Lane in Thousand Oaks, sold for $42,575,000. The property consists of 26 two-story buildings situated on 8.88 acres of land. Purchased by APIP Pavilion, a San Mateo investment entity which plans major upgrades to the common areas and unit interiors. “APIP owns another property in the area which they are also renovating,” said Zander, who represented both buyer and seller. The seller, Pavilion Associates of Corona Del Mar, had owned the property for more than 20 years. The deal came in with a capitalization rate of 5.5% on stabilized income. Hendricks & Partners also closed on a 67-unit apartment community, Casa Vaquero, 1630 Calle Vaquero in Glendale. The property sold for $16,350,000, above the listed price. “We are pleased that this property is Calera’s first acquisition in the Southern California market for our new venture at a place in time when true value creation opportunities are few and far between. The stellar location coupled with the value-add opportunity fits well into Calera’s business strategy with our institutional partners,” said Jerry Binkley and Chaille James, President and Sr. Vice President of Calera Investment Group, LLC of Santa Clara, in a prepared statement. According to Zander, Calera plans to invest approximately $15,000 into interior and exterior renovations. That, plus the fact that Glendale apartment vacancy rates are below 3 percent, will likely result in rents 20 percent higher than the average in the area. The seller was DMC Investment Group, Inc. of Los Angeles, CA, a relative of the original builder. That October transaction was negotiated by Zander and David Casper of Hendricks & Partners on behalf of both the Buyer and the Seller. Calabasas Correction It turns out the Calabasas property we wrote about last week was actually sold to Koll by a joint venture composed of Troxler Value Fund and D2 Development. That according to Bryan Troxler, who said they are also going to be selling another adjacent property which has a 30,000-square-foot creative office building that now houses the Troxler offices. A contract to market the project was just awarded to Lee & Associates. Troxler said it should go on the block in January. “The building is designed to have a low profile from the outside but is high profile on the inside,” he said. “It’s got high ceilings and glass everywhere kind of like what you would see in a Santa Monica architectural office or a Burbank or Santa Monica studio space.”
