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Thursday, Mar 28, 2024

Owner, Real Estate Agents Have Huge Task at Shop

Harvey Schwartz has a monumental task on his hands. Last July, the owner of 20th Century Props in North Hollywood began liquidating close to 93,000 items stored in his warehouse located in an industrial area just south of Lankershim Boulevard and Sherman Way. He made headlines last spring when he decided to close the business, considered one of the largest prop houses in the U.S., due to what he said was decreased demand from “run-away” production, industry work slowdowns, and the flailing economy. But three auctions later, he’s still sitting on tens of thousands of pieces of furniture, lighting fixtures and myriad odd items packed floor-to-ceiling in the 108,000 square feet warehouse. The property also has approx. 80,000 square feet of outdoor space. “The up-coming auction should go pretty well,” said Schwartz, prior to hosting the latest sale in early December. But he estimated the sale would only move another couple thousand items. “I’ve started giving items to charity, will soon invite swap meeters in to buy stuff, and will probably end up tossing a lot in the trash.” Clearing out quirky television and movie props is just one of the challenges of shutting down a business of this scale. Brokers at CB Richard Ellis are also facing the not so small task of selling or leasing a large industrial property – by Valley standards that is – in a tough market. This is the second time Schwartz has folded a business. In the 1970s he owned and operated two retail stores, one on Melrose Avenue and another on Main Street in Santa Monica. But decreased local production related to the Screen Actors Guild strike in the late 1970s hit hard, he said. The only saving grace was filming of the science-fiction classic, “Blade Runner.” The production, which debuted in 1982, ended up spurring enough sales and rentals to sustain one of the stores for a little bit longer. In the past few years, decreased local production tied to labor problems and companies filming out of state led Schwartz to diversify. He began a party rental business that made up for some of the lost business, but then the economic meltdown hit. “I lost as much as I could lose and in April decided to pull the plug,” said Schwartz. Woodland Hills-based Great American Group conducted the first auction in July, and Schwartz worked with Super Auctions on the second and third sales. The industrial property, which he does not own, was also placed back on the market in August, he said. David Harding, Gregory Geraci, and Barbara Emmons of CB Richard Ellis’ Universal City office are marketing the property. The 108,100 square foot building, located at 11651 Hart Street, was constructed in 1971 and is situated on a 182,516 square foot lot. The asking price is $13,836,800, or $128 per square foot. The asking lease rate is $.65 per square foot net, according to CBRE. “Generally this is a very good industrial property for the San Fernando Valley market,” said Harding. “However, the market is softer today, so there’s not as much lease and sale demand as a whole.” That said, competition is limited in the Valley for this size range, because the area tends to be a smaller building market, he added. A few of its features include eight dock-high positions, 19’ to 22’ clear heights, and two separate and fenced paved yards. Another factor possibly playing in the property’s favor is that the eastern San Fernando Valley industrial market experienced a lower vacancy rate and negative net absorption in the third quarter of 2009, compared to many other Valley markets. Colliers International reported the eastern San Fernando Valley industrial market had negative net absorption of 9,300 square feet in Q3, and a direct vacancy rate of 2.8 percent. The property is getting activity, said Harding, adding it is well positioned for entertainment companies, because of its proximity to major studios, and would work well for manufacturing and distribution companies, among others. Clearing out 20th Century’s movie and television props certainly won’t hurt the curb appeal, he said. But in the meanwhile, all of that stuff is having at least one positive effect. “People are fascinated, and it has actually prolonged the length of some tours,” he said. Schwartz said he’s committed to clearing and vacating the space as fast as possible. And, once he does, he has no interest in ever opening another prop business. “I’m hoping somebody walks up and says, ‘I’ll buy the whole thing,’” said Schwartz, adding “Maybe after all this I’ll do some type of consulting work for the industry, or coaching.”

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