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Sunday, Jun 4, 2023

Great West

greatwest/valley/dy/20″/mike1st/mark2nd DOUGLAS YOUNG Staff Reporter The bidding war for control of Great Western Financial Corp. has yet to yield a winner, but one thing is clear: No matter which bidder wins, thousands of Great Western workers are likely to receive pink slips. And many of those layoffs will come from Great Western’s headquarters campus in Chatsworth. The pending layoffs and resulting empty office space will deal a blow at least temporarily to the West Valley office market and to the dozens of local merchants that rely on Great Western employees for business. Neither H.F. Ahmanson & Co. nor Washington Mutual Inc. has announced how many of the 3,000 jobs each would cut at the Chatsworth campus after a merger, although both have indicated some layoffs are probable. Most of Great Western’s headquarter employees work in 1 million square feet of office space spread out among 14 buildings on the campus. Some or all of that space would likely be put up for sale or lease after a merger between Great Western and either Ahmanson or Washington Mutual. Some retailers at the nearby Northridge Fashion Center expressed concern over future layoffs at Great Western. “I probably get about 5 percent of my business from that office,” said Constance Marchetti, manager of George Allen Shoes. “I don’t think it would be a big hit. But to lose that 5 percent, I would have to replace it with something else.” Said Annette Bethers, the mall’s marketing manager: “It’s something we’re concerned about and will be monitoring.” But she noted that any layoffs are probably still months away, adding “We can’t imagine those buildings will sit empty. We’re sure those buildings will be leased to other companies, and that (business) will come back.” Smaller merchants in the area expressed more concern about the pending Great Western merger. Restaurants will probably be hardest hit by layoffs, since many rely on Great Western workers for a significant portion of their lunchtime business. “I really hope they stay here, because we do a lot of business with them,” said Cary Baker, manager of the Kenny Rogers Roasters restaurant located across from the campus on Corbin Avenue. Besides lunchtime customers, Kenny Rogers also caters Great Western functions. Real estate brokers were more optimistic predicting that the Great Western buildings would lease up quickly if layoffs resulted in office space emptying out. They attributed their optimism to the recovering Valley economy, combined with the overall attractiveness of Great Western’s campus as an office location. “I would think the space could get readily leased up within a year,” said Bill Ripberger, a director in the San Fernando Valley office of Cushman & Wakefield of California Inc. “There are big tenants in the market today, and you could probably get one tenant to take the entire” 200,000-square-foot building at the campus center. Likewise, Jeff Woolf, president of the Lee & Associates office in Sherman Oaks, expects most of the Great Western space would only take 12 to 18 months to fill if and when it comes on the market. “This space is well-situated in a nice, campus-like environment,” said Woolf. “It’s quality space, and it will be absorbed.” Woolf noted, though, that a downsizing or departure of Great Western will boost the West Valley office vacancy rate and put downward pressure on office rents there in the shorter term. “The Chatsworth/Northridge office markets are very skinny. Between the two, there’s not 250,000 square feet of Class A office space. So if a lot of this space were dumped on the marketplace, it would have a large effect on vacancy rates in that market,” he said. “We would also probably see some downward pressure on rents, though it’s tough to say how much,” he added, saying the specific amount and type of space being emptied out would influence the magnitude of any downward pressure.

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