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Tuesday, Jun 6, 2023

Burbank Developer Not Wasting Time on Sale of Condos

It’s a familiar refrain these days how does a home builder get their product sold in a timely manner in this challenging market? Gangi Development of Burbank has decided to go the auction route with their new Glendora townhome development. On Dec. 14, the companies hope to sell all 20 of the units in the Vermont Avenue Lofts complex in one fell swoop. Given that the craftsman-style homes are expected to fetch prices about 50 percent lower than what the developer anticipated when the project was conceived a few years ago, the cost savings of the auction format are very appealing, said Frank Gangi. “Instead of selling over an eight, nine or 10-month period, we’re basically selling the units in one day,” said Gangi. “That lowers our cost on financing.” Not to mention the money they’ll save on overhead like on-site staffing and conducting long-term advertising and marketing campaigns. Another feature of the auction touted by both Gangi and the auction house is the transparency of the process, which they say makes potential buyers feel like they’re buying their home at a fair price. “In this case, say 20 homeowners have paid similar prices,” said Rhett Winchell, president of Kennedy Wilson Auction Group. “This way they’re confident they didn’t overpay, and they’re confident the seller’s not going to go through a big price reduction down the road.” <!– Townhomes: Gangi hopes to sell out Glendora project in one day. –> Townhomes: Gangi hopes to sell out Glendora project in one day. That buyer confidence, added Winchell, translates into sales. The auction house has built in a number of additional ways to help potential bidders feel more secure in the process. Model homes are open at the site for a month leading up to the auction and the preferred lender, Wells Fargo, will be available to prequalify anyone that may need financing. On the Saturday one week prior to the event, Kennedy Wilson will be hosting a buyer seminar to familiarize attendees with the auction process. And for convenience sake, they have even set-up a website where bidders can participate remotely. Over the past two years, Kennedy Wilson has conducted approximately 30 builder auctions. “We consider it the ‘new normal,’ where a lot of builders are thinking about this right up front because this really does work,” said Winchell. For sellers like Gangi, he said, the auction becomes a “grand opening” event. It’s not the first time this developer has used the auction process. “Back in the early 1980s, when interest rates were sky high, the process was used to move a lot of inventory quickly,” said Gangi. But it may be another 20 years before they do another auction, he added, as the company has no more projects of this type on the boards. “We’re now shifting to producing affordable housing for rent, rather than for sale,” Gangi said. Milestone When TOLD Corporation put the finishing touches on its Flynn Road Business Park in Camarillo, it reached a milestone: it was the five millionth square foot of construction for the company in Ventura County. Better yet, the first building in the final phase of the Told Corporation’s Flynn Road Business Park in Camarillo sold recently for $1.2 million to R & D; Transportation. The industrial team of CB Richard Ellis’ Ventura County office facilitated the sale for the buyer and the seller. The 4,640-square-foot unit is one of the smaller in the 13-acre project and will house R & D;’s headquarters which have been located in Moorpark. Seniors Rule Two senior living facilities celebrated their grand openings in the West Valley this month. Vintage Encino Hills and Monarch Village Tarzana both offer an array of amenities such as fine dining, housekeeping and laundry, transportation and lots of social, recreational and educational activities. Vintage also has an assisted living program that includes medication monitoring, help with bathing and grooming, and escorts to make sure they get around the property safely, Vintage Senior Living, based in Newport Beach, currently owns and operates 18 properties in California. Monarch Village Tarzana is a development of Santa Ana-based American Senior Living which has developed 27 facilities since its founding in 1982. Nice Doggie The North Ranch Mall in Westlake Village has signed a $4 million lease with new anchor tenant Petco. The animal emporium will have its grand opening just in time for the holidays, said Michael Schiff of NAI Capital which represented the owner. Vic Montablo of Epsteen & Associates took care of Petco in the transaction. Happy Holidays The Burbank Collection will be celebrating its official grand opening on Dec. 3 with the opening of Barney’s Beanery and retailer Glitz which join yogurteer Pinkberry in the retail portion of the complex. Things will get busier in March when three more eateries Zpizza, Johnny Rockets and Crepe Maker are scheduled to open, along with a Skechers shoe store. To My Dear Readers Although it’s hard to believe, we will be publishing just two more issues of the San Fernando Business Journal before the end of the year. I would really like to hear from those of you in the commercial real estate industry about how you’ve managed to survive the turmoil we’ve experienced so far; and what plans you have to get through the year to come. Staff Reporter Linda Coburn can be reached at (818) 316-3123 or at lcoburn@sfvbj.com .

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