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Thursday, Mar 28, 2024

LNR Warner Center Bought By Player New to Region

Chalk up another vote of confidence for the Warner Center real estate market. LNR Warner Center, a complex of five buildings totaling 808,274 square feet, has been sold to Hines, an international real estate firm, for a whopping $385 a square foot. The most recent sale at LNR Warner Center, two buildings totaling 358,684 square feet, brought about $290 a square foot. That was just last year. Hines, which acquired the center through a subsidiary Hines-Sumisei U.S. Core Office Fund L.P., paid a total of $311 million for the property, which was built in stages by LNR between 2001 and 2005. Each of the buildings was sold off once completed, and RREEF North America eventually acquired the entire campus. The acquisition is the first in the local area for Hines, a privately-held firm whose portfolio totals about 915 properties with about 360 million square feet of office, mixed use, industrial, residential, land and other real estate. The company has developed numerous landmark office buildings including Bank of America Center in Houston, Wachovia Financial Center in Miami, 53rd at Third in New York, 101 California in San Francisco and 191 North Wacker in Chicago. Its Woodland Hills acquisition will join a portfolio of core office buildings in geographically diverse areas of the country. “Our acquisition of LNR Warner Center represents a strategic move for our firm in a submarket that we have been closely monitoring for years,” said Colin Shepherd, senior vice president at Hines. LNR Warner Center, located at Canoga and Burbank avenues, has been on a winning streak literally since it was built, with the buildings leasing up as quickly as they were built. The roster of tenants currently includes Net- Zero, Univision Music and Health Net. RREEF was represented by Eastdil. Hines represented itself. Warnings Issued Despite all recent evidence to the contrary, real estate firms and brokers are beginning to express concern about the commercial market as a result of the slowdown in the residential housing sector. In a letter to clients, Colliers International Senior Vice President John DeGrinis warned of “storm clouds” on the horizon, noting that the bull real estate market of recent years, paralleling the bullish housing market, may be in for a down cycle. In his letter, DeGrinis noted that the consumer economy shows signs of unraveling. “Most American consumers are spending more than they are earning,” DeGrinis said. “What will the impact to real estate be when the consumer pulls the reins?” Similarly, a report by Grubb & Ellis suggested that real estate closely tied to the housing market may be in for a correction. “Landlords and investors should be aware of their exposure to housing-related tenants in their properties and their submarkets and adjust their management and leasing plans accordingly,” said Jim Lindvall, senior vice president for Grubb in Sherman Oaks. The warnings come even as commercial real estate, particularly in the greater Valley region, continues to show considerable strength. A Colliers report noted that extremely low industrial vacancy rates in the San Fernando Valley and Ventura County industrial market continued to bolster sale prices in the second quarter of the year. Industrial sale prices rose 24 percent in the region to $127 per square foot and rental rates climbed 6 percent in the same period. Over the past five years, average sale prices for industrial properties in the region have soared 80 percent, the report revealed. Grubb concluded that the impact of the slowdown in the housing market will have a modest effect on the commercial real estate sector. At the same time, the report noted that the sharpest impact is likely to be felt in the West where housing prices have increased most dramatically. Chatsworth Lease A maker of aircraft repair products has leased a 100,000-square-foot facility in Chatsworth. The 10-year deal is valued at about $7.5 million. Ontic Engineering and Manufacturing, a unit of BBA Holdings in the U.K., is relocating from a building next door. The property is located at 20400 Plummer St. John DeGrinis and Patrick DuRoss, brokers with Colliers International, represented the tenant and the landlord, Rabinovitz Family Trust. Westlake Deal The Walking Company has leased a 15,271- square-foot office space in Westlake Village for total consideration of $3.3 million. The terms of the deal were not disclosed. The office building is located in Townsgate Tech Center at 2475 Townsgate Road. Marc Spellman, Mark Leonard and Mike Tingus, all with Lee & Associates-LA North/Ventura, represented the landlord. The Walking Company was represented by Gary Wagmeister of Corporate Realty Consultants. Appointments Rory Ferlauto, Don Hudson and Nancy Uy have joined Colliers International’s Private Capital Advisors group, focusing on the multifamily market. The team was most recently with Sperry Van Ness. They will be based out of Colliers San Fernando Valley office. The PCA practice group was developed by Glen Esnard, who was recently named president of Colliers International Brokerage Services USA. NAI Expands NAI Capital has opened its 15th office location in Riverside. The Encino-based commercial brokerage said the office reflects the growth pattern in the Inland Empire. The brokerage has named David Moore and Julia Corona Thompson to head brokerage activities at the new office. Senior reporter Shelly Garcia can be reached at (818) 316-3123 or by e-mail at sgarcia@ sfvbj.com

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