Coast/garcia/20″/LK1st/mark2nd By SHELLY GARCIA Staff Reporter Trammell Crow Co. is in escrow to acquire the former Coast Federal Bank headquarters, in a deal that will bring an additional 375,000 square feet of office space to the West San Fernando Valley market. Officials at Trammell Crow said company policy prohibits commenting on the status of transactions until they are completed, but sources close to the deal said it is expected to close by the end of the year. If successful, Trammell Crow would acquire a campus of six buildings that are among the only available office units in the West Valley able to accommodate companies that require more than 50,000 square feet. The development also has the potential to retain for the city of Los Angeles companies that might otherwise relocate to the Santa Clarita Valley or the so-called tech corridor in the Conejo Valley. “The product is a very good lower-cost alternative for certain types of users,” said Rick Pearson, senior consultant with Metrospace/CRESA Los Angeles. “Rents are going to be 15 cents to 20 cents lower than the tech corridor.” The acquisition also would put the company head-to-head with Regent Properties, which has been actively marketing a similar property just across the street. But Trammell Crow officials said they believe the market is large enough to accommodate both properties. “If you’re a 50,000-square-foot tenant, you have very limited choices,” said Mark Ossola, vice president for development services at Trammell Crow. “So this site is a viable choice.” The property is part of a site that housed the missile division of Hughes Aircraft until 1994, when the company downsized and relocated. Coast acquired it in 1996 and sold off a portion to the city of Los Angeles, which is building a 911 facility, and Devry Institute, which is building a 16-acre college campus. The Coast headquarters property went on the block earlier this year after H.F. Ahmanson & Co. acquired Coast and consolidated its headquarters staff with that of its other bank division, Home Savings of America. (Ahmanson has since merged with Washington Mutual Inc., and will relocate its current headquarters in Irwindale to Washington Mutual’s new L.A. headquarters in Chatsworth.) If the deal goes through as planned, Trammell Crow could begin renovating five of the buildings as early as next spring, with occupancy slated for spring or summer of 2000. The company would refurbish the plumbing, heating, air conditioning and other structural aspects of the property to turn the facility into Class A office space. Such space is at a premium in the West San Fernando Valley, where the office vacancy rate hit an all-time low of 9.2 percent for the third quarter of 1998, according to Grubb & Ellis Co. But unlike the office buildings in Warner Center, the West Hills site caters to a different customer. Warner Center was built with an eye toward attracting professional-services companies that require access to amenities like restaurants for business lunches and hotels for visiting clients. Though just a 10-minute drive from the West Hills site, Warner Center is more upscale catering to tenants who are concerned with impressing clients, not the cost-conscious companies likely to be drawn to West Hills, brokers said. The West Hills site, at Fallbrook Avenue and Roscoe Boulevard off the 118 Freeway, has virtually no restaurants nearby, although it does have a 16,000-square-foot cafeteria that would be shared by the two office parks. Monthly per-square-foot office rents in West Hills average 25 cents to 30 cents lower than Warner Center and, unlike its tonier neighbor, there is no extra charge for parking. As a result, brokers say, West Hills is better suited for labor-intensive companies where workers tend to spend the whole day at the facility instead of going out to meetings. “It’s more attractive for back-office, R & D-type; users who don’t want to pay for parking,” said Pearson. In theory, those differences open the door to a new market of tenants that in recent years have moved out of the San Fernando Valley to the Conejo or Santa Clarita valleys, where space has been plentiful and rents cheaper. Regent Properties, which is currently marketing West Hills Corporate Village, a 30-acre complex just across the road from the site Trammell Crow is acquiring, got off to a rocky start when two prospective tenants failed to materialize. The company has yet to lease about 160,000 square feet of the office space currently standing on the property, or to attract any build-to-suit tenants for the remaining, as-yet-undeveloped portions of the center. It has signed a deal with Boeing Co., which will house its Rocketdyne Propulsion and Power division there. Executives at Trammell Crow said their rival’s misfortune has not shaken their faith in the development. “Obviously, it would have been nice to have Regent Properties fully leased, but we still think the site is a very valid site,” said Ossola. The buildings on the site Trammell Crow wants to acquire range from 30,000 square feet to 160,000 square feet which, according to Ossola, would give the company flexibility to choose from a wide array of tenants if it acquires the parcel. At the same time, Boeing’s recent decision to relocate to the Regent Properties’ Corporate Village, along with Devry, which has already started construction on its new campus, “lends legitimacy” to the development, Ossola said.